Faster patent approvals on anvil for firms making in India

New Delhi: Businesses with smart innovations may soon have the red carpet laid out for them if they manufacture in India but need a patent quickly before they do so.

Such patent applicants could soon jump the queue and fast-track to production if the views of an official panel take the form of law. Of course, they have to set up factories in India, and produce sufficient quantities. The trigger for change? A lawsuit in the Delhi high court.

In December 2013, Japanese adhesive tape maker Nitto Denko Corp. went to court, frustrated by the delays it faced at India’s patent office. Noting the inordinate delays in patent grants in India, justice Vibhu Bakhru of the Delhi high court asked the government to set up a committee on 9 October last year.

An eight-member panel with representatives from the department for industrial policy and promotion, the Controller General of Patents, Designs and Trademarks and intellectual property lawyers studied the matter, and filed its report in the high court through lawyer Sanjeev Narula on 27 February. The report suggested the addition of a new provision to Patents Rules, 2003, to lay down the procedure for out-of-turn examination of select patent applications.

Applicants who have already started manufacturing their invention in India or who undertake to manufacture it within two years after filing their application could benefit from the new process, subject to the condition that quantities manufactured by them should be sufficient to meet the reasonable public requirement for the invention in India.

This safeguard—recommended with past experiences in mind—will prevent a situation where a foreign company obtains a patent but does not produce sufficient quantities, leading to shortages and exorbitant prices.

The report lays down a strict timeline for all steps in the patent process. Within a month of receipt of the application, the patent controller must refer it to the examiner. The examiner shall ordinarily take one month and a maximum period of three months to prepare a report and the controller will have another one month to dispose off the report.

The proposed procedure can lead to the disposal of a patent application in 14-18 months, a process that now takes five-seven years, a person close to the development said on condition of anonymity.

Still, an applicant who seeks a 20-year patent in 2010 and gets it in 2015 will enjoy patent protection only until 2030, losing five years. In this context, the court had also asked the committee on possibly giving compensation for the patentees for the delay. This, however, did not find favour with the committee.

At present, there is no provision in Indian laws to extend the patent term on account of delays in grant of the patent. The committee report says: “The proposal is not conducive to India, where the monopoly for 20 years itself is considered too long to block genuine competition. In today’s world, technologies covered by inventions/patents become obsolete too fast. Encouraging obsolete technologies and protecting them with longer patent term is not advisable.”

The proposed move was a victory for the courts and this government, said Pravin Anand, managing partner of Anand and Anand, a law firm specializing in intellectual property matters.

“This is a new wave of reform that through a single writ petition we have achieved such a remarkable result that the government is seriously looking at ways to reform the process of examination of patents,” said Anand, who represented Nitto Denko in court.

However, such piecemeal solutions may not fix the larger problem of patent delays, he said.

“The recommendations ignore the fact that this is a larger problem of speeding up applications,” Anand said. “If you want to reward a creative, innovation-based economy, you cannot do it unless you expedite patent applications. But you have to do it for everybody. The only factor that has been considered is the unreasonable requirement of local manufacturing.”

There are other voices of caution as well.

“There is a huge burden of patent applications and a lot of pressure from applicants to process these quickly. When you put pressure to expedite the examination of patent application, quality suffers. Obviously, quality of examination will be compromised. These patents are granted and then on closer examination patents, nearly 50% of patents get revoked when challenged,” said Leena Menghaney, access campaigner with Médecins Sans Frontières, or Doctors Without Borders. “India is relatively new to product patent regime. We have brought in a lot of improvements, like online submission of applications, quick turnaround time, etc., but this situation is not exclusive to India. Even in the European Union, it takes close to seven years,” she said.

Intellectual property expert Shamnad Basheer sounded sceptical as well.

“I am very doubtful of the efficacy of this particular incentive, the probability that someone who was never going to manufacture in India is suddenly going to do so on the promise of this expedited examination incentive is rather remote,” he said.

“This extra layer of expedited examinations will burden the patent office even further and possibly even cause delays in the disposal of other pending applications. As a policy measure, it is good to incentivize local manufacture, but this particular measure is likely to entail more costs for us than any serious benefits,” said Basheer, founder of SpicyIP, a blog on intellectual property and innovation law and policy.

“It is unlikely that this can be misused. Having said that, big pharmaceutical companies are constantly looking for faults in the Indian patent system,” said D.G. Shah, secretary general, Indian Pharmaceutical Alliance, a grouping of domestic drug makers. “The delays in granting patents is a global phenomenon and comes with the due diligence. It cannot be compromised.”

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.