The IP division at Delhi High Court may be a harbinger of a new era, but India would do well to look further afield for examples of best-practice IP dispute resolution, Argues KS Kardam, former senior joint controller of patents and designs at the Indian Patent Office
The creation of the intellectual property division (IPD) within Delhi High Court is a significant step for efficiently handling IP matters in India.
The IPD is consistent with the government’s 2016 national IPR policy, which prioritised improving India’s IP protection and enforcement systems. The IPD also aligns with global trends for the establishment of specialised tribunals.
The dismantling of the Intellectual Property Appellate Board (IPAB) along with other appellate tribunals by way of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, on 4 April 2021, paved the way for the IPD’s creation. In the interim, the functions of the IPAB were transferred to the appropriate high courts or commercial courts. About 3,000 pending IPAB appeal cases from IP offices, and revocation matters have been transferred to the Delhi High Court.
The court was already responsible for IP matters including lawsuits relating to: The infringement of trademarks, copyrights, and patents; writ petitions and revision petitions from IP suits in the commercial courts; and appeals of IP suits from orders and judgments of the commercial courts.
The IPAB was officially established on 15 September 2003 to provide a venue for appeals against the decisions of the registrar under the Trademarks Act, 1999, and the Geographical Indications of Goods (Registration and Protection) Act, 1999. The IPAB’s jurisdiction was later extended to patents, in 2007, authorising it to adjudicate appeals from the decisions, orders and directions made by the controller of patents under the Patents Act of 1970.
The IPD was established by the court on the recommendations of a two-member committee of judges to resolve the large influx of IP cases efficiently and expeditiously. Delhi High Court is currently formulating comprehensive rules for the newly created IPD,
which will act as a specialised bench in the high court to address IP-related cases. It will be governed by the IPD Delhi High Court Rules. Original proceedings before the IPD will also be governed by the Delhi High Court (Original Side) Rules of 2018, as well as the provisions of the Civil Procedure Code (CPC) and the Commercial Courts Act of 2015.
The IPD will be responsible for matters including:
(1) all original and appellate proceedings relating to IP disputes, such as civil writ petitions, regular first appeals and first appeal orders;
(2) all-new IP filings in the various IPR categories; and
(3) IP suits, revocation applications, cancellation applications, appeals from the offices of the registrar of trademarks, controller of patents, copyright registrar, and all other proceedings under the provisions of: the Trade Marks Act of 1999; the Copyright Act of 1957; the Patents Act of 1970; the Designs Act of 2000; the Geographical Indications of Goods (Registration and Protection) Act of 1999; the Protection of Plant Varieties and Farmers’ Rights Act of 2001; and the Semiconductor Act of 2000, which were all previously maintainable before the IPAB.
The Chief Justice of the Supreme Court of India released updated nomenclature in respect to IPR disputes on 13 July 2021, enabling applicants to file applications before the courts to resolve their disputes.
Issues to be addressed
While the development of the IPD may be praised for efficiently resolving IPR disputes, there are several outstanding issues to be addressed.
1. It remains unclear whether all high courts in India will replicate a system like the IPD of the Delhi High Court. If the IPD system will be replicated throughout the high courts in India, the timing is still unknown.
2. There is a significant pendency of cases in almost all the high courts. Given the limited lifespan of certain IPR such as patents, the IPDs of high courts may have to prioritise IP cases over civil and criminal cases, and may increase the number of judges assigned to these IPDs.
3. With a growing number of IP litigations on substantive issues, the number of appeals from the decisions, orders and directions made by the controller of patents under the Patents Act, 1970, and the registrar of trademarks under the Trademarks Act of 1999 and the Geographical Indications of Goods (Registration and Protection) Act, 1999, are bound to increase over time. It remains in question whether the resolution of such matters will be timely addressed, specifically the rejection of any application for IPR on formal grounds or petty matters.
4. A technical expert is valuable when addressing patent matters, especially regarding emerging technological subjects, but it has not been specified if an expert will be included in the IPDs to provide a better understanding of the subject, similar to the technical member of the IPAB.
In addition to the above-mentioned issues, the question remains on whether high courts will be able to dispose of appeals from IP offices, revocation applications, infringement suits and writ petitions within a reasonable time period, considering the huge pendency of other cases. Apart from the timely disposal of such appeals, litigation costs would be another cause for concern. In order to practise before the high courts, lawyers must possess a law degree and be bar members.
Attorneys who could practise before the IPAB did not need these requirements and, despite their experience, would not be permitted to practise before the high courts and commercial courts. In these situations, the new divisions would be required to hire lawyers and advocates who are members of a bar association in place of former IPAB attorneys, which would increase the costs of litigation.
IP appeals in other countries
Before proposing a system that is easily accessible, cost-effective and sustainable in the long term, assessing international systems provides different examples of how to solve IP disputes, specifically appeals of rejected IP applications. International methods from the US, Europe, Japan, China and South Korea provide blueprints for India to address the above-mentioned issues.
Many countries have established appeal courts or appeal boards within IP offices that function under an administrative jurisdiction. These courts and boards allow applicants that appeal the decision of a patent examiner to seek redress. Here are several examples.
The US
The Patent Trial and Appeal Board (PTAB) is an administrative adjudicatory body of the US Patent and Trademark Office (USPTO), which was established in 2012 under the America Invents Act. The PTAB is the successor to the Board of Patent Appeals and Interferences. It conducts trials, hears appeals from adverse examiner decisions in patent applications and re-examination proceedings, conducts derivation proceedings and renders decisions in interferences.
The PTAB currently handles more than 100 petition trials per month. In the 2020 fiscal year, 1,513 petitions were filed in total, of which 1,429 petitions were IP-related, according to the USPTO. The PTAB is growing rapidly because its trials are relatively efficient, inexpensive and narrow in scope compared to litigation in other forums. Even throughout the pandemic, the PTAB was the busiest forum for patent challenges in the US and continued to meet its timeliness goals while under scrutiny from the Supreme Court. An example of this scrutiny is the Supreme Court’s decision, on 21 June 2021, in United States v Arthrex Inc, addressing the constitutionality under the appointments clause of appointments of the PTAB’s administrative patent judges (APJs).
Arthrex is a medical device company that owned a patent subject to inter partes review. Three APJs issued a decision that found the claims unpatentable. Arthrex appealed to the Court of Appeals of the Federal Circuit, claiming that the appointment of the APJs violated the appointments clause of the US constitution. The Federal Circuit agreed, finding that the statute as currently constructed makes the APJs principal officers who must be appointed by the president, with the advice and consent of the senate.
The court held that the APJs were principal officers whose appointments were unconstitutional, because neither the US secretary of commerce nor the director of the USPTO had the ability to review their decisions or remove them at will. To remedy this violation, the Federal Circuit removed the APJs’ tenure protections, granting the secretary the power to remove these officers.
The Supreme Court agreed with Arthrex and the Federal Circuit decision, but offered a different remedy than that of the Federal Circuit. The Supreme Court held that the APJ’s unreviewable authority during inter partes review was incompatible with their inferior officer appointment by the US Secretary of Commerce. Severing the language of section 6(c) of the America Invents Act, the Supreme Court wrote: “In sum, we hold that 35 USC section 6(c) is unenforceable as applied to the director insofar as it prevents the director from reviewing the decisions of the PTAB on his/her own. The director may engage in such a review and reach his/her own decision. When reviewing such a decision by the director, a court must decide the case ‘conformably to the constitution, disregarding the law, placing restrictions on his/her review authority in violation of article II’.” Thus, to ensure that APJs function as inferior officers, the Supreme Court held that the director may engage in such review and reach his or her own decisions.
In response to the Supreme Court decision in United States v Arthrex Inc, the USPTO implemented an interim procedure for the director’s review, granting the director authority to review a PTAB decision unilaterally. A director review may be requested either by a party to a PTAB proceeding, or suasponte (of one’s own will) by the USPTO director.
To request a director review of a post-grant review decision, or a final written decision in an inter partes review, parties must enter a request for rehearing by the director into the PTAB electronic filing system and submit an email to the director to notify him or her of their request. The UPSTO’s interim process for a director review preserves the PTAB’s ability to function effectively.
Europe
Article 21 of the European Patent Convention has provisions for establishing boards of appeal within the jurisdiction of the European Patent Office (EPO). These boards of appeal are responsible for appeals from decisions of the receiving section, the examining divisions, the opposition divisions and the legal division. Depending on the type of appeal, technically qualified members may be required.
For instance, appeals from decisions of the receiving section or the legal division require three legally qualified members on the board of appeal. For appeals from decisions of an examining division, a board of appeal consists of two technically qualified members, and one legally qualified member when the decision of refusal of a European patent application, or the grant, limitation, or revocation of a European patent, has been taken by an examining division consisting of fewer than four members.
However, when the decision by an examining division consisting of four members, or when the board of appeal considers that the nature of the appeal so requires, the board will consist of three technically and two legally qualified members and, in all other cases, the board will consist of three legally qualified members.
Similarly, for appeals from a decision of an opposition division, a board of appeal would consist of two technically qualified members and one legally qualified member, when the decision has been taken by an opposition division consisting of three members. However, when the decision has been taken by an opposition division consisting of four members, or when the board of appeal considers that the nature of the appeal so requires, then the board would consist of three technically and two legally qualified members.
Article 22 of the convention specifies the provisions of establishing an enlarged board of appeal within the jurisdiction of the EPO, which is responsible for:
(1) deciding on points of law referred to it by boards of appeal;
(2) giving opinions on points of law referred to it by the president of the EPO; and
(3) deciding on petitions for review of decisions of the boards of appeal. The appointment of members of the boards of appeal, and of the enlarged board of appeal, including the chairpersons, is carried out by the administrative council on a proposal from the president of the EPO for a term of five years.
Japan
The Japanese Patent Act also specifies the provisions of the trial and appeal department within the Japan Patent Office. This department presently consists of 38 boards of trial and appeal for various subjects, out of which there are 32 divisions exclusively for technological patents, two divisions for design and four divisions for trademarks. These boards are managed by about 380 administrative judges, including a judge in charge of patents, designs and trademarks.
According to article 136 of the act, a trial is conducted by a panel of three or five examiners. The panel decision is conducted by a majority vote. The commissioner of the patent office, under article 136(1), designates the trial examiners to constitute a panel for each trial. The commissioner, under article 137(1), also names one of the trial examiners as the chief trial examiner, whose role is to preside over matters relating to the trial.
A patent applicant who is dissatisfied with an examiner’s decision to refuse their application may file a request for a trial against the examiner’s decision of refusal within 30 days from the date that the certified copy of the examiner’s decision has been served. Such a trial is conducted by a panel consisting of three or five trial examiners.
China
Article 43 of the Chinese Patent Law provides that the patent office shall set up a patent re-examination board (PRB). This board is responsible for the re-examination of applications when any party is dissatisfied with the decision of the patent office to reject their application, or the decision of the patent office to revoke or uphold the patent right. The aggrieved party may request a re-examination from the PRB within three months from the date of receipt of the notification.
The PRB, after re-examining the issues, will decide and notify the applicant, the patentee or the person who made the request for revocation of the patent right. The PRB consists of both technical and legal experts appointed by the patent administration department of the State Council.
South Korea
Article 132-16 of the Korean Patent Law has provisions for the establishment of the Korean Intellectual Property Trial and Appeal Board (IPTAB) and specifies that it shall be established as an institution under the jurisdiction of the commissioner of the Korean Intellectual Property Office (KIPO). The IPTAB is authorised to conduct trials and retrials for revoking a patent or a utility model, as well as for patents, utility models, designs and trademarks, and take charge of investigations and research. The Korean IPTAB comprises a president and administrative patent judges.
If a person has an objection to a ruling that rejects a patent application, or rejects an application to register the extended term of a patent, he/she may file a petition for trial within 30 days from the date when he/she is served with a certified copy of the ruling.
The IPTAB is a quasi-judicial body of the KIPO, which serves as the court of first instance for IP-related dispute resolution, and is independently operated within the KIPO. The IPTAB consists of 36 boards, a trial policy division and a litigation division. Each board consists of one presiding administrative judge and two administrative judges who conduct trials or appeal cases. The trial policy division is responsible for receiving documents, conducting formal examinations, trial quality evaluations, etc., and the litigation division is responsible for litigation proceedings for cases in which the commissioner of the KIPO is the defendant.
The way forward
The international practices of the above-mentioned major IP offices demonstrate how these systems are functioning smoothly, and are successful in resolving IP disputes within their jurisdiction to the satisfaction of IP stakeholders. However, for India to create a similar system would require an amendment to IP laws. Such an amendment seems highly unlikely in the immediate future, but it may not be ignored for longer.
It remains to be seen how soon other high courts in India will take Suo moto (of its own accord) action to establish IP divisions, like the one created by the Delhi High Court, so that cases transferred from the IPAB can be taken up for further action and aggrieved parties do not unnecessarily suffer further. However, for a variable, sustainable and easily accessible system, the following is recommended.
Considering international practices and experience, it would be ideal to have a system functioning like the PTAB in the USPTO, the trial and appeal department in Japan, the IPTAB in Korea, or even the re-examination board in China, or the technical board in the EPO. These technical boards have separate specialised administrative judges designated from the senior officials of IP offices for patents, trademarks, designs, copyrights, etc., which enhances the quality of decisions.
For instance, in Japan, there are about 380 administrative judges working in the trial appeal department. Similarly, in other countries there are significant numbers of administrative judges supported by examiners, therefore the decision process is generally conducted by a majority vote or consensus, avoiding bias and arbitrariness. Since they are appointed by the heads of IP offices, these boards continue to function uninterrupted, and by continual judicial training, and their judicial skills are also refined.
Since these boards are following a simple procedure, the proceedings are concluded without undue delay. Furthermore, as patent attorneys and advocates can practise before such boards, the cost of litigation is reasonable. Such an administrative appellate system in India would be most suited for long-term sustainability. To create this system, India’s IP laws must be amended, which is a significant challenge but not an impossible change.
To reduce the burden of high courts, IP offices need to strengthen the review mechanisms provided in IP-related legislation or implementing regulations. For instance, under section 77 of the Patents Act, a controller of patents is granted the powers of a civil court in respect of the certain matters which include:
(1) reviewing his/her own decision;
(2) setting aside an order passed ex parte; and
(3) any other matter that may be prescribed.
Under these provisions, the controller can review his/her own decisions by tweaking these provisions, or making the amendments in patent rules by prescribing certain activities such as reviewing decisions of senior controllers under section 77(1)(h) of the act. Having such provisions in the rules, as mandated under the act, would largely resolve issues within the IP office itself, especially in relation to applications that are rejected or refused on formal grounds, or petty issues, or even substantive grounds with proper reasons, or having failed to observe natural justice. Similar provisions are also provided under the Trademarks and Designs Act.
In the former IPAB, there was a provision for a technical member with experience in patents, trademarks, copyright, and plant variety and farmers rights. In the high court, however, there are no such provisions, except that the court may appoint an independent scientific adviser to assist the court. However, this appointment has not been made mandatory and, therefore, in matters relating to patents, designs and plant variety protection there is a need to hire a technical expert.
One of the lacunas in the IPAB was that it did not require technical experts, but was able to adjudicate all kinds of matters. Therefore, the IPAB was ineffective at adjudicating matters properly, and a huge delay in adjudication added fuel to the fire. The present system, in accordance with provisions of the ordinance of 2021, has its own limitations and therefore is not viable, easily accessible and, more importantly, sustainable in the long term.
In most of the jurisdictions, the IP dispute resolution system consists of three tiers, such as trial and appellate boards, or re-examination boards within IP offices, including invalidation proceedings. The decisions of such boards can be challenged in high courts and after that in the Supreme Court.
KS KARDAM is the former senior joint controller of patents and designs at the Indian Patent Office. Summer Keating, an intern, in the US office of Davé Law Group, and Raj Davé, president of the firm, also assisted with the article.
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