This article summarizes key patent developments of 2016 including developments and initiatives by the Indian government to spread IP awareness and promote innovation by coming out with National IP policy. Further it captures the cases decided by the courts and changes at the Patent office.
a) National IPR Policy
After more than a year of deliberation since the first draft was released by task force constituted to prepare the policy, the Department of Industrial Policy and Promotion (DIPP) released new National IPR Policy on 13th May, 2016. The policy sets out the objective of promoting a holistic and conducive ecosystem in India in order to catalyse the full potential of Intellectual property for country's economic growth and socio-cultural development, while protecting the public interest. The rationale behind the policy lies in the need to create awareness about the importance of IPRs as a marketable financial asset and economic tool.
The government has notified DIPP to act as a nodal department, to coordinate/guide and oversee implementation and future development of IPRs in India. Further, it has brought the administration of the Copyright Act, 1957 and the Semiconductor Integrated Circuits Layout-Design Act, 2000 under the aegis of DIPP, besides constituting a Cell for IPR Promotion and Management (CIPAM) to facilitate more effective and synergetic working between various IP offices, as also promotion, creation and commercialization of IP assets. As a result of this the Controller General of Patents, Trademarks and Designs has been re-designated as Controller General of Intellectual Property. The policy has identified seven objectives listed below
- IPR Awareness: Outreach and Promotion
- Generation of IPRs -To stimulate the generation of IPRs
- Legal and Legislative Framework -To have strong and effective IPR laws, which balance the interests of rights owners with larger public interest
- Administration and Management -To modernize and strengthen service oriented IPR administration.
- Commercialization of IPR -Get value for IPRs through commercialization.
- Enforcement and Adjudication -To strengthen the enforcement and adjudicatory mechanisms for combating IPR infringements
- Human Capital Development -To strengthen and expand human resources, institutions and capacities for teaching, training, research and skill building in IPRs
b) IP boost for start-ups in India
The first of its kind event, "Start-up India, Stand-up India" that kicked off on 16th January, 2016 brought together start-up community and policy makers. The government's objective for this initiative was quite clear 'let us encourage innovation'. With that in mind Prime Minister Narender Modi announced an action plan for start-ups categorised in 19 points. A Start-up to qualify for tax and other incentives put forth by prime minister must fall under the definition of a Start-up. A Start- up has been defined as an enterprise which is less than 5 years in operation with turnover not exceeding 25 crores (approx US $ 3.9 million) working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property. Soon after the announcement was made by prime minister, the Controller General of Patent and Trademarks issued a notification on January 18th 2016 to launch a scheme for promoting intellectual property amongst start-ups and encouraging innovation. The scheme was launched under the name 'Scheme for Facilitating Start-ups Intellectual Property Protection (SIPP)'. The scheme aims to promote awareness and adoption of IPRs among Start-ups. It further aims to provide Start-ups with high quality IP services and resources. The Government has also empanelled IP Facilitators (Patent Agents and Trademark attorneys) who will be working with start-ups in filing and prosecuting Patent applications.
c) New Patent Rules come into force
The new Patent Rules were implemented on 16th May 2016 to expedite grant of Patent by reducing the time for putting an application in order for acceptance in 6 months from the 12 months. A further extension of 3 months can be obtained on filing a request. The new Rules are also a step towards Digital advancement by including the provision of conducting the hearing by video conferencing. At the same time, the Patent office while implementing the Rules, based on representation of stakeholders, reduced the fees for expedited examination by a legal entity from INR 250,000 (approx US$ 3788 (originally proposed in draft Rules) to INR 60,000 (approx. US $ 910) which has been widely welcomed. The key changes being that timeline for putting application in order for acceptance has been reduced from 12 months to 6 months.
d) Government Intervention on Standard Essential Patents - FRAND Terms
Standard Essential Patents (SEP) on FRAND terms" was widely discussed and debated in the Indian Courts last year. A number of cases concerning SEP in the mobile phone industry brought by Ericsson against Indian companies importing smart phones from China and Chinese companies selling smart phones in the Indian market are subject of cross litigation between the parties. The issues concern abuse of dominant position, calculation of royalties and interim injunction being granted in such cases. The Department of Industrial Policy & Promotion (DIPP) with the aim of developing a suitable policy framework to define the obligations of Essential Patent holders and their licenses issued a paper on the subject. The 28 pages Discussion paper elaborated on a number of topics including the basics of Standard Essential Patents, Competition laws, Standard Setting Organisation, Ongoing recent SEP cases and ends with a list of "Issues for Resolution" seeking the opinion of concerned stakeholders on those issues. In this regard, views and suggestions were invited from public at large, pertaining to issues concerning Standard Essential Patents (SEPs).
e) New CRI examination guidelines
The Patent Office in 2016 recalled the 2015 guidelines on examination of computer related inventions (CRI).. The new Guidelines are now in line with the provisions of the Patents Act 1970 that exclude mathematical and business methods, algorithms and computer programmes per se from patentability. The new Guidelines provide that the inventive step in any invention must be a feature that is not an excluded subject itself. For the purposes of interpreting 'technical advance' as provided under Section 2(1)(ja) the Guidelines state 'that comparison should be done with the subject matter of invention and it should be found that the advancement is not related to any of the excluded subjects'.
f) GM technology on FRAND terms:
This is another development where private rights of a patentee were pitched against public interest. Monsanto produced genetically modified cotton plant (Bt Cotton) by introducing relevant genes (imparting the pesticidal property) to the plant for imparting resistance property against pests like bollworm. Monsanto obtained a patent grant on this technology of gene modification which involves incorporation of Bacillus thuringiensis gene (Bt gene), in a plant cell to render them free of disease/infection like Bollworm etc. The Indian seed companies refused to pay outstanding royalties for pest resistant cotton genes to Monsanto's Indian subsidiary Mahyco Monsanto Biotech (India) Ltd (MMBL) and as a result MMBL ended the licensed agreement with the seed companies and commenced the arbitration proceedings before the Bombay High Court and infringement proceedings before the Delhi High Court. There was also set up an enquiry from Competition Commission of India (CCI) over pricing of Monsanto's pest-resistant cotton genes after a preliminary finding by CCI that MMBL abused its dominant position in the seed market by setting unfair and high trait fees. In the sequence of events, came out the order passed by Ministry of Agriculture, regulating not only the maximum sale price of cotton seeds but also the possibility of government interference for controlling royalty fee in licensing arrangements and private agreements (through guidelines). The Agricultural Ministry decided to cut royalty fees by 70 percent on cotton seeds and has also put a cap on seed prices across all states. Though the guidelines were rolled back by the Ministry for the public feedback, still the decision caught too much attention and critics as well. Monsanto pleaded against Ministry's Order before 'the' Delhi High Court to quash provisions pertaining to the price control order and authorisation to determine royalty fees.
g) Compulsory licensing
An application was filed by Lee Pharma, a Hyderabad based pharmaceutical company to grant Compulsory licence for AstraZeneca's drug Saxagliptin. The Controller in this case rejected Lee Pharma's application for the grant of compulsory license as the applicant failed to provide evidence and satisfy the Controller regarding any of the grounds as specified in Section 84(1) of the Act.
h) Gilead v. Optimus Pharma & Ors.
The Patent Office approved Gilead's patent application for its Hepatitis C drug Sofosbuvir (commercially known as "Solvaldi"). The Patent Office rejected six pre-grant oppositions that had been filed and ordered the granting of the application. However, I-MAK and DNP (two of the opponents) filed an appeal with the Delhi High Court on the grounds that the decision of the Indian Patent Office is contrary to the public interest, fails to assess the full scientific and legal evidence presented and ignores key Indian patent law and judicial precedent.
To Sum up
2016 was eventful year with IP taking centre stage in the form of National IP policy. IP holders can expect further progress as the government roles out policy initiatives to fulfil various objectives set out in the policy. Already a good start has been made with Indian Patent Office disposing-off patent applications at a rapid speed clearing the backlog. Further, the government initiative to improve its position in the ease of doing business index is making them critically evaluate the time it takes for IP disputes to be decided by the Courts.