The top official in the Indian Patent Office’s Chennai branch was detained along with one colleague earlier this month on charges of graft. While digital technologies and transparency initiatives have generally made India’s IP granting authorities more accountable in recent years, the arrests suggest that corruption has not been fully stamped out of the patent office.

The main official implicated was S P Subramaniyan, a deputy controller of patents and designs in the patent office at Chennai. The corruption branch of India’s Central Bureau of Investigation (CBI) also booked T V Madhusudhan, another deputy controller, in connection with the case. Chennai is the site of the second largest patent office branch after Delhi by headcount: 115 examiners of patents and designs work there under 34 assistant controllers and seven deputy controllers. So the arrested pair are both quite senior. In addition, this page on the website of India’s Controller General of Patents Designs & Trademarks seems to indicate that Subramaniyan was the top man in Chennai.

The charge concerns a patent application made by Radha Decors, a business based in Puducherry, in 2010 entitled: “A composition, ornamental plaster mould and method of preparing the said mould thereon”. According to the CBI, Subramanian demanded a bribe of 300,000 rupees ($4,700) from Radha proprietor and named inventor G R Kaliaperumal to secure the issuance of the patent. It was granted in 2015, allegedly after the payment was made.

So-called “speed money” to make the bureaucracy move more quickly is not unheard of, including in IP examinations in India. Our sister publication, World Trademark Review, has reported on graft cases in the Indian Trademark Registry in the past, including the 2016 jailing of a trademark registrar in a "speed money" case. But what allegedly happened next in this current case is somewhat surprising - and remarkably cynical.

Subramanian, it is said, suggested that the patentee send demand letters to three companies (one Malaysian, two Indian) who were importing infringing goods. Predictably, this led the accused infringers to file a post-grant opposition. On 9th June 2017, Subramanian allegedly demanded one million rupees ($15,600) from the patentee in order to rule his way in that revocation action. Prosecutors say Kaliaperumal balked, and on 9th August 2017, the patent was revoked. The decision, available here, was signed by Madhusudhan, the other arrested controller.

Three things stand out in this specific case.

  • First, as mentioned above, this was not simply a small sum to speed things along (“doing the right thing, but doing it faster”, as one trademark attorney described it to WTR). Subramanian is accused of engineering an opposition to the patent and then effectively holding it hostage, a much more serious matter.
  • Second, the sums of money involved. 300,000 rupees is at least 10 times the amount a large entity would pay in filing fees in the worst case scenario. And the price of keeping the patent at the opposition stage escalated to over $15,000 – no small sum for what it sounds like was a local SME business. In comparison, a trademark official was arrested in 2008 for soliciting bribes of just 10,000 rupees ($150).
  • Third is the seniority of the officials implicated. As made clear in this organisational chart there are just two people in the entire patent office structure with a rank higher than deputy controller – one senior joint controller in Delhi and the controller general himself, O P Gupta. The fact that two out of Chennai’s seven deputy controllers have been charged with corruption makes things difficult for those who would argue that this is an isolated case.

As this blog has reported, there has been a very large influx of manpower to the Indian Patent Offices over the last year or two. Stakeholders in India’s IP system will want to know what kind of culture these new examiners are entering. Hopefully, these arrests send a strong signal that corruption will not be tolerated.