Recent times have witnessed a paradigm shift in India towards protection and promotion of intellectual property rights and in particular, protection of patents. The startup boom, the ruling Government’s ‘Make in India’ campaign and judicial intervention in the case of Nitto Denko Corporation v. Union of India1 have all contributed to the passing of Patents (Amendment) Rules, 2016 (hereinafter ‘the Rules’).
The Rules, passed by the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry, came into effect on 16th May, 2016 and specifically address the issue of excessive delays, backlog of applications at the Patent Office and higher costs in prosecuting applications, especially for new businesses.
In order to foster innovation, promote investment and entrepreneurship in India, the Rules now specifically recognize ‘startups’ as patent applicants. The Rules define ‘startups’2 as being any entity working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property, provided that not more than five years have lapsed from the date of incorporation of such an entity and the turnover does not exceed rupees twenty-five crores for the said five financial years. Taking into account the initial difficulties faced by such businesses, the Rules further provide for lower fees for prosecuting patent applications filed by such startups as compared to others.
The Rules have also introduced various provisions to reduce delays at the Patent Office. In particular, the Rules have now made electronic filing of patent applications by a patent agent mandatory3. Another salient change introduced by the Rules is the reduction in the time to put a patent application in order for grant from 12 months to 6 months from the date of issuance of First Examination Report. This period is further extendable only to a maximum of three months.
Recognizing that speed is key in today’s day and age, the Rules have further introduced a special provision for ‘expedited examination’4 of patent applications. Thus, under the new Rules, an applicant can request for expedited examination of his/her application, if he/she fulfills any of the two conditions, namely (i) when the applicant has indicated India as the competent International Searching Authority or elected India as the International Preliminary Examination Authority in the corresponding international application or (ii) the applicant is a ‘startup’. The time period within which the examiner has to submit his / her report regarding patentability of the invention to the Controller and in turn the Controller has to dispose of the report and issue the First Examination Report has also been considerably reduced under this special provision,5 the total period being between one to three months. This provision is also the direct result of a writ petition filed by Anand and Anand for Nitto Denko Corporation6 before the Delhi High Court, wherein the Government of India also committed to spending more than 300 crore rupees, (roughly USD 40 million) for recruitment and creation of new posts for Patent Examiners, training of Patent Examiners and solving issues relating to salaries, attrition rate at the Patent office etc.
Another welcome change under the Rules is that hearing before the Controller of Patents can now also be held through video-conferencing or any other audio-visual communication device7 and an applicant or a party to a proceeding is entitled to only two adjournments, with each adjournment not for more than thirty days.8
In a pre-grant hearing, the Rules provide that both the statement and evidence as filed by the Applicant have to be served to the Opponent, in addition to the same being filed at the Indian Patent Office. Further, the Controller has to pass a speaking order within one month from the date of final hearing.9
The Rules also provide for refund of fees in case an applicant withdraws his application before the issuance of the First Examination Report10 and further provide a cap on fees for filing sequence listing, which in the case of a startup is a maximum of 24,000 Rupees (roughly USD 370) and in the case of other entities is a maximum of 1.2 Lakh Rupees (roughly USD 1800).
The much-awaited Patents (Amendment) Rules, 2016, thus lay down stricter timelines for compliance while providing the ease of modern technology and facilities, with lower costs to applicants. The Rules lay down the foundation for expediting, streamlining and strengthening intellectual property protection in India, bringing India in line with its global counterparts. The Rules, further, aim at boosting investment and fostering innovation by promoting startups in India and are a welcome change.
Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.