This article has been written by Jibisa Janvi Behera and Digvijay Khatai, 3rd year law students at National Law University, Odisha

Introduction

Applications for patents submitted outside of India are referred to as “foreign patent applications”. To obtain international protection for their innovation, inventors need to submit independent applications to each relevant jurisdiction to the Controller of Patents, an authority appointed by the Central Government to administer registration and approval of patents in India.

The Patent Rules (Amendment) 2024  notified by the Department of Promotion of Innovation and Internal Trade with the very objective of streamlining patent procedures in India, seems to increase the discretionary powers of the said authority with respect to examination of foreign applications in an unregulated manner.

In this blog, we fundamentally seek to analyze how the bestowal of such unregulated discretionary powers leaves the fate of foreign applicants in a state of ambivalence, which further undermines the patent-friendly aspect of the patent procedure. Finally, we underscore the need of a dedicated appellate body for the purposes of ensuring checks and balances in the present patent ecosystem.

Loopholes in the Previous Framework

The Patent Rules, 2003 already had vested a great deal of power and authority in the Controller, allowing them to condone delays, demand additional information and influence processes, etc. Consequently, several instances have been seen where Controllers have exercised discretionary powers arbitrarily to pass adverse orders against foreign applicants without giving them a chance to be heard.

In the case of Rolic Ag Et Al vs The Controller General of Patents, a foreign patent application was rejected by the Controller without declaration of a firm reason. A loophole in the law was observed by the Intellectual Property Appellate Board (‘IPAB’) while scrutinizing the refusal. It noted that while under Section 15 of the Patents Act 1970, the Controller is allowed to refuse patent application by exercising its discretionary powers, there is no obligation on him to provide reasons for such cancellation.

It was noted that such exercise of powers was not only deemed to be a gross violation of natural justice but may also have pernicious implications on the patent ecosystem of India. The IPAB laid down that refusal orders passed against applicants must be clear, explicit, and not vague. It was also laid down that the absence of clear reasons is arbitrary in law and hence not valid if passed.

Foreign Applicants Under New Amendment

Rule 12 of the Patent Rules, 2003 governs the matters of statements and undertakings regarding applications made outside India. As per Rule 12(3), a foreign applicant was under a duty to furnish any information whatsoever pertaining to any objections pursuant to the patentability and novelty of the invention at the event of an exigency notified by the Controller of Patents, Designs, and Trademarks.

This primarily meant that the applicant was required to keep the Controller informed of any subsequent applications filed outside India, similar to the invention of the applicant. This also implied that the applicant was supposed to utilize all the relevant accessible databases in personal possession to cater to the concerned obligation.

With the new amendment in place, Rule 12(3) stands starkly modified. Now the onus to determine whether a patent application has been filed outside India, similar to that of the concerned applicant, has been shifted upon the Controller. For the purposes of the same, the Controller has been conferred the power to utilize all databases accessible and available to the patent office. Also under the amendment, the only obligation that remains to be catered to by the applicant is to furnish identifying details of the foreign patent applications inquired by ‘Form-3’ as prescribed by the Patent Rules 2003.

Hence, the Controller of Patents can now, after utilizing a limited pool of databases in the Patent office determine the patentability of the invention, and check for any subsequent patent application in a foreign country like that of the applicant. The approval or rejection of the foreign application now remains contingent upon a slanted procedure which does not involve any involvement of the applicant who appears to be a crucial stakeholder in the process. This makes room for arbitrary management of foreign applications which may result either in whimsical rejections of genuine patent applications or approval of already existing applications for similar inventions outside India.

The bestowal of significant autonomy to the Controller’s authority coupled with the one-sided nature of the procedure of dealing with foreign applications now leaves the fate of applicants to the absolute discretion of the Controller. Applicants with grievances are now subjected to a ‘Review Committee’, which is both constituted and supervised by the Controller Office itself. The Review Committee is supposed to examine the grounds on which the applicant lodges a protest against the Controller’s decision to refuse the grant of the patent. The powers of constituting of the committee being vested with the Controller himself, naturally give him a free pass to either induct members that would set his agenda on the table or influence the overall decision-making process of the body.

Bring IPAB back?

The IPAB was established in India as a quasi-judicial body with the very objective of effective adjudication of IPR disputes, matters relating to granting of licenses, approving patent applications, etc. Keeping the powers of the Controller of Patents in check was also one of its duties. Earlier, applicants could appeal to the IPAB in the event of any adverse orders being made. There have been multiple instances in the past where regulated intervention of the board has saved foreign applicants from the whimsical passing of adverse orders against them by the Controller.

With the abolishment of IPAB in 2021, we lack dedicated corrective authority above the Controller to keep its discretionary powers in check. Furthermore, the only option remaining exercisable to applicants today is to engage in frivolous litigation in the District and the High Courts, in case of any adverse orders being made against them either by the Controller or the Review Committee.

Concluding analysis and suggestions

The fate of foreign patent applications in India have been quite uncertain over the years. A significant number of applications have been subjected to adverse orders based on the Controller’s discretion. While we do not question the efficiency of the Controller of Patents to adjudicate patent disputes, we seek to oppose the unregulated nature of discretionary powers vested with the authority.  The new amendment has sought to bring structural changes to the current patent ecosystem in India. However, it seems that it successfully inherited the loopholes of the previous patent rules; that is, conferring momentous autonomy and discretionary authority to the Controller of Patents without making any effort to judicially regulate the same.

This undermines the applicant-friendly aspect of the procedure of patent applications in India. Looking at how the lack of a dedicated appellate body leaves the fate of foreign applicants to the absolute mercy of the Controller; we conclude that the reinstatement of a judicial authority like the IPAB may not only serve a crucial purpose in unburdening the courts but help preserve principles of natural justice by regulating the uncontrolled powers of the Controller. The same will be a sign of relief to applicants who do not wish to engage in ineffectual rounds of litigation in the courts.