Part I: A Peek Behind the Curtains of the Patent Amendment Rules 2024
SpicyIP
In early July, Prashant shared with us a mammoth RTI response containing juicy insights on the comments received on the Patent Rules and the 2021 Standing Committee Report on the IP regime in India. The response also included the Patent Office’s replies to stakeholders’ comments on the Draft Patent Rules, 2023, which reveal an interesting contrast between their position and the ultimate outcome on some provisions, as well as other considerations (such as the FTA negotiations) owing to which the final call was deferred to the DPIIT. Looking at these responses, Arnav Kaman and Pranav Aggarwal highlight how the final version of the rules fails to take into account the Patent Office’s suggestions on some provisions, and how the FTA negotiations played a role in amending India’s domestic policy on certain levers
The first draft of this part of the post was prepared by Arnav Kaman and Pranav Aggarwal, following which Praharsh and Swaraj helped refine and finalise it into its current form. In Part II of the post, Arnav takes a deep dive into the diversity of the stakeholders who participated in this process and highlights the glaring lack of participation by academia. Arnav and Pranav are 4th year law students from the Rajiv Gandhi National University of Law, Punjab. [Long post ahead]
A Peek Behind the Curtains of the Patent Amendment Rules 2024
In the midst of the news regarding the government’s plan to overhaul the IP regime in India and seminars by government departments and bodies to “demystify” the concerns with India’s recent Trade Agreement with the UK requiring India to make many changes in its patent regime, we got our hands on some very interesting information via an response to an RTI (pdf), filed by the prolific Prashant Reddy T. The detailed 616 page response gives us an insight into different concerns raised by stakeholders against the First draft Patent Amendment Rules and Indian Patent Office’s response to them. In some of the responses, notably those concerning Form 27, the Patent Office asked DPIIT to look into them, keeping in mind the parallel FTA negotiations and in some other cases, there seems to be a difference in what the Patent Office suggested versus what was eventually published in the final rules.
Readers will recall that back in 2023, the Department for Promotion of Industry and Internal Trade (DPIIT) had invited comments on the draft Patent Rules, which were expected to (and did) make substantive changes to the Indian Patent regime (see here for a table on how the amendment changed the Patent Rules; also see Swaraj and Praharsh’s two part post here and here). There were two sets of amendments to the Patent Rules- first, making substantive changes in the existing IP regime and the second one to further the provisions of the Jan Vishwas Act. The post concerns RTI responses on the former. The RTI response gives us access to the different suggestions made by different stakeholders and CGPDTM’s comments on them, which were then presumably shared with DPIIT.
At the outset, it must be noted that the response discloses responses not only concerning the stakeholders’ comments on the 2023 Draft Patent Amendment Rules, but also the comments on the 2021 Departmental Standing Committee Report on the IP regime in India. While it must certainly be appreciated how detailed this response is, running for 600 + pages, it also raises the question of why these stakeholder comments and responses aren’t already made public. Such transparency would certainly contribute to more inclusive and healthy discourse on the Indian IP regime.
It must be noted that in some instances, the RTI reply has not been formatted properly and we have limited access to the suggestions and responses. For this post, we’ll focus on the part concerning the Patent Amendment Rules and the difference in approach between the CGPDTM and the DPIIT where the former suggested some changes, especially concerning foreign filings (under Section 8) and pre-grant oppositions (Section 25(1)), which were eventually not considered by the DPIIT in the final version of the draft. We’ll look at some of the suggestions given by the stakeholders on pressing issues such as foreign filings, pre-grant oppositions, working statement requirements, and the responses given by the CGPDTM to them.
Curious Case of Form 3 and Foreign Filing Information: Keeping the Amendments Which are Against Substantive Provisions of the Act?
One of the major changes contemplated was regarding the status of foreign filings by patent applicants who’ve filed same or similar filings in India. The earlier rules required patent applicants to keep the controller informed about such applications on details of such foreign filings within 6 months of filing a patent application abroad. (See S. 8 of the Patents Act 1970, and Swaraj and Praharsh’s earlier blogpost discussing the proposed changes and its implications then). In response to these proposed changes, some stakeholders said it would be too much of a burden to patent applicants and proposed shifting the burden to the patent office to find out these details if they wished, instead.
This is where it gets interesting. The RTI reveals that the CGPDTM stated that shifting the burden would be inconsistent with the statutory mandate under Section 8 (see screenshot below). However, as we now know, the final accepted Rules reversed this position! The proposed amendment was notified, shifting the burden of finding out about an applicant’s foreign filings and related information to the patent office to find independently on their own. This begs the question – what happened between the CGPDTM’s position in the feedback, and the finalisation of the Rules by the DPIIT, that took this u-turn?
Screenshot of one such response to the proposed amendment to the requirement under Rule 12 (3). CGPDTM response is in the right side column. (See Page 320 of the RTI document for the complete table)To re-iterate why this position change is particularly interesting: On the amendment itself, a bare reading of Section 8 nowhere indicates that the controller needs to collect the foreign data themself but rather that the Applicant has to disclose the required detail. Aside from the legal hurdles, practical difficulties will arise too when it comes to dealing with information regarding foreign applications. The below picture provides the comment by the Japan Intellectual Property Association on Rule 12. If the office of the Controller has difficulties in ensuring clarity of understanding on the stakeholder comments, how can it take on the additional burden of assessing the technical patent documents of other jurisdictions in foreign languages?
Snippet from the RTI Document. CGPDTM’s response is in the right column.(See Page 329 of the RTI document for the complete table.)Secondly, it is absurd that for an obligation which exists till the grant of the patent, how can the window for informing about other foreign applications be three months after the first statement of objections? This goes against the very objective of this provision, as also been suggested in the Ayyangar Committee (Page 141), to provide sufficient information to the Controller to properly examine the application. Both these changes evidently relax the procedure for the Patent applicants at the cost of information necessary for the accurate examination of the applications. It makes one wonder why applicants filing in other countries where they presumably have reason to file and no doubt track closely, don’t want to disclose this information.
Pre-grant Oppositions and Objections on “Maintainability”
This draft amendment proposed two material changes in the pre-grant opposition mechanism. First, the rules introduced the payment of a dynamic fee for filing a pre-grant opposition which could have ranged from INR 20,000 to over 1 lakh. Second, the draft rules had required the controller to decide the maintainability of the opposition submitted before objections could be sent to the Patent applicant. First off, to highlight, as per the IPO’s information (as given on pp 83-84 of the RTI), pre-grant oppositions are equivalent to only 0.55 – 1.57% of the published applications – so the problem itself seems to be a strawman problem.
Moving on to the proposed amendment, on maintainability, the CGPDTM suggested that the concept of maintainability should be removed and instead the provision should be amended stating that after considering the pre-grant opposition (representation), the Controller should pass a reasoned order stating if the application shall be removed or if it should be amended. (see below)
Screenshot of CGPDTM’s comment asking to remove the maintainability requirement from the provision. (See Page 362 of the RTI document for the complete table.)In stark contrast to CGPDTM’s suggestion, DPIIT instead introduced the requirement for the Controller to first find a prima facie case for the opposition.It is important to note that here, the pre-grant oppositions are considered by the Patent Office while examining an application, and thus, its suggestion on how these oppositions are to be considered should be deferred to. Instead, the DPIIT introduced an additional layer of inquiry. So it begs the question- where is this push coming from, for the DPIIT to prefer it over the CGPDTM’s own preference? Perhaps the recent trade deals with the European Free Trade Area and the UK where both parties have asked India for a prima facie type setup for disposing of a pre-grant opposition. This apprehension is further solidified by looking at the response to one of the stakeholders (see below)
Screenshot of Response by the CGPDTM on Pre-grant opposition. CGPDTM’s response is in the right column. (See Page 380 for the complete table).On making pre-grant oppositions expensive, several stakeholders opposed the introduction of the fees as an unnecessary barrier for genuine objections. Pre-grant opposition can be filed by ‘any person’ under the statute and imposing an artificial barrier restricts this process to only those who can afford..
The response of the controller indicates that they had supported dynamic fees and no suitable justification was given for imposing such hefty fees. The final rules, however, fixed the fees at Rs. 4,000 and Rs. 20000 for individuals and companies, respectively.
In contrast to what was proposed initially, this schema of hearing will provide enough opportunity to the opponent to defend the objections and the fees to file a pre-grant opposition too have been reduced. But essentially, these amendments have made pre-grant opposition procedurally complex and financially burdensome for the stakeholders
Expensive Extensions and Condonation of Delay
Amendments in Rule 138 allowed a condonation of delay and extensions for essentially any single timeline prescribed by the rules for the ‘small’ fee of Rs. 50,000 from the earlier Rs. 8,000 for only a limited number of timelines. While most stakeholders gratefully accepted such a rule, allowing them the liberty and discretion to extend timelines, almost all of them raised concerns of the fee of Rs. 50,000 per month.
The patent office responded to these criticisms stating that such a fee is “justified as everything cannot be free or cheap” and further stating “The sizeable amount of fee is being prescribed to prevent parties from using this provision to cause undue delay in proceedings, which is also a demand from India’s negotiating partners in the FTAs”. While the fee is not per-se problematic, it is the reasons that raise questions, as there appears to be substantial weight given to these FTA negotiating partners in deciding factors that will also be affecting domestic players.
Misunderstanding on the Utility of Working Statements and the Influence of FTAs on Domestic Policies
On concerns stemming from amendments to the requirement to file annual working statements as per Rule 131 and under Form 27, many stakeholders asked to completely remove the form entirely or appreciated the diluted version of the safeguards. The amendments require the patentee to merely tick the response to the question of whether the patent has been worked or not, instead of providing detailed information on the figures on approximate revenue/ value accrued. Some of the stakeholders, comprising civil societies and others, did raise concerns that the amendment will reduce the obligation to furnish the working statements to a mere paper formality and will impact other patent levers like compulsory licensing and granting injunctions. However, looking at the comments from the CGPDTM their concerns have fallen on deaf ears.
For the objections against diluting Form 27 requirements, the CGPDTM has two standard responses. First, the CGPDTM once again defers to the DPIIT by stating, “DPIIT may decide as this issue is related to FTAs”. This not only adds to the long-standing theory that greater weight is given to the interests of the trading partners (see here) but also directly indicates that the dilution to Form 27 was a part of the negotiations in the FTAs! Form 27’s importance cannot be overstated for the overall health of the domestic patent ecosystem ensuring that patent owners fulfil the patent bargain, including by meeting the requirement of working, and ensuring sufficient information is available for statutorily and judicially available remedies such as injunctions and compulsory licenses. It appears that FTAs and negotiating partners have influenced the recent changes greatly.
The CGPDTM’s second response is equally telling: “With a reduction in frequency, the ability to file CL will not be adversely affected. In any case a CL applicant has to wait for 3 years from the date of grant of patent and at that time the form 27 will have to be filed by the patentee.” Simply because a compulsory license cannot be granted in the first 3 years they justify its frequency being reduced to an interval of three years. In fact, in another response, the CGPDTM states “Purpose of Form 27 is not solely related to CL”, so even the 3 year logic, faulty as it is, doesn’t actually provide a reason.
But the dilution doesn’t stop there. The original draft amendments released in August of 2023 recommended a note to Form 27 making its relation to Section 83 explicit. Yet the final amendments in 2024 has no mention of section 83 at all, courtesy of the second response of the patent office: “Linking for form 27 with Section 83 by way of the 2nd note of form 27 may be reconsidered. Purpose of Form 27 is not solely related to CL. Section 83 is restricted to CL, while section 146 is not.”Such responses can only be understood as part of a concerted effort to reduce the power of section 83 by diluting the provisions and rules that uphold it.
What Section 146 envisioned as a regular requirement to publish information detailing “the extent of the working of patent on a commercial scale” had once been diluted with amendments in 2020, removing the public requirement (see here for a critique) has now been further reduced to a shadow of its former self by these amendments. Any recommendation that calls for a return to Form 27 pre-2020 amendments that might include more reasoning and detail is met with a non-reply.
It should be noted that under the current Rules, a company hypothetically could import 1 product every 3 years and be able to claim they have fulfilled the working requirement. With the current requirement being diluted to such an extent, in a way, the demands for the removal of the entire form have come true.
How the Rules of the Game are Changed
The Draft Patent Amendment Rules 2023 were released on August 22, 2023 and the last date to file comments was September 22, 2023, only a period of 30 days was given. The final responses consist of unique comments from a total of 71 unique stakeholders. These stakeholders range from companies, patent agents, firms, civil societies and their suggestions all differ from one another. In almost all the amendments the Office prefers to prepare a few catch all answers that they believe addresses all concerns. In many other instances, the CGPDTM does not substantively engage, stating “No Comment”. Take for example, the comments on Rule 131 that brings changes to form 27. Almost 50 comments have been submitted and the office does not reply to almost 30 of them and replicates the same 3 answers for the other twenty.
Several stakeholder submissions indicated a lack of clarity or had misinterpretations of the rules. The CGPDTM did not substantively engage with these. Later though, for at least one of these issues (Form 27), they held a public meeting and released a Form 27 FAQ to clarify the new changes.
There is a lack of any substantive law explaining how these stakeholder consultations should take place. Even as per the non binding pre-legislative consultative policy, “the degree of participation and mode of consultations may be decided by the Department/Ministry concerned”. However, in Global Energy Ltd. v. Central Electricity Regulatory Commission, the Supreme Court did indicate that the responsibility of the state to properly involve the public in such legislative processes emanates from the constitution itself. Notably, in the present case, many of the recommendations by stakeholders were incorporated considering the changes from the draft amendments to the final amendments in 2024, yet it does not hide the fact that the responses by the office are many times cryptic and insufficient.
Section 159 of the Patent Act delegates the power of creating rules for implementing the act to the Central Government. Such delegation is justified on the ground that highly technical fields such as IP require frequent procedural and administrative updates that are best handled by a class of executives with domain specific knowledge, the DPIIT and the office of the CGPDTM in this case. Yet in multiple instances noted above, it appears that the amendments in the patent rules directly dilute the provisions of the original Patent Act itself. In some areas, they seem completely inconsistent and potentially ultra vires. In comparison to the amendments of the Patent Act in the past 20 years, the patent rules have been continuously updated. These rules are put forth before parliament according to section 160 but they undergo little scrutiny by either house and while delegated legislation is subject to judicial review, the patent rules are rarely challenged in the court of law (one exception is Humanity Life Extension)
In Re: Delhi Law Act clearly establishes the constitutionality of delegated legislation in so far as it does not delegate essential legislative functions. These current amendments might appear procedural changes yet they have an enormous impact on the substantive nature of the patent policy of the country. The technocratic class of executives shape the patent policy through amending patent rules without the scrutiny that the legislature undergoes. Admittedly, legislation cannot be involved with deciding every single change to the patent rules considering a paucity of time and a lack of technical expertise but when draft rules are notified with a call for comments for only 30 days, with limited transparency, lackluster responses, no standard of accountability is met.
As India seems to be on the verge of “overhauling” the IP regime, the institutions involved in shaping and changing our patent policy must be held accountable to strong democratic overview and undergo thorough public consultation.
In part II of the post Arnav will discuss the diversity of stakeholders who participated in the process by sending their comments.
The authors extend their thanks to Prashant Reddy for sharing the documents and his inputs on this, and to Praharsh and Swaraj for their patience and persistence.