Patent Enforcement Measures in India

IP laws are extremely important for the scientific development of a country. Strong IP legislations ensure the progress in varied fields and result in the growth of a country's knowledge bank. However, it is of utmost importance that the strong IP laws must be ably supported by an equally strong enforcement mechanism as well. Fair, strong and non-discriminatory IPR enforcement creates economic incentives that encourage innovation. A strong IPR regime helps attract new investment and allows innovators to develop new technologies. Weak intellectual property enforcement is a major barrier to increased trade. This is unfortunately the case with the IPR enforcement in most of the developing countries, including India.

Amongst the IP Rights, this situation is particularly true in the area of patents. In India the patent legislation is governed by the Patent Act, 1970. The 1970 Patent Act

 was an outcome of various previously existing patent legislations including the Patents & Designs Protection Act, 1872, the Protection Of Inventions Act, 1883.
The Patent Act, 1970 provides for the enforcement of patents by way of suits for infringement. In dealing with these suits, the Indian Courts follow the traditional principles and procedures of civil litigation. However, after the coming into force of the TRIPs Agreement from 1995 various methods have been adopted by the legislators to improve the enforcement measures with regard to patents. These have been discussed under the below heads in detail.

The TRIPs Agreement:

The International community around the early 1990?s came to realize the importance of IPRs and their effective enforcement for the growth and prosperity of any country. Fallout of this realization was the TRIPs Agreement which was signed at the Uruguay Round of the WTO in 1994 and which came into force on 1st January 1995.

TRIPs Agreement strives to achieve more effective patent enforcement measures in its member countries. An important step towards achieving this has been embodied in Article 34 of the agreement, which reads as follows:

Article 34 - Process Patents: Burden of Proof

1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner referred to in paragraph 1(b) of Article 28, if the subject matter of a patent is a process for obtaining a product, the judicial authorities shall have the authority to order the defendant to prove that the process to obtain an identical product is different from the patented process. Therefore, Members shall provide, in at least one of the following circumstances, that any identical product when produced without the consent of the patent owner shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product was made by the process and the owner of the patent has been unable through reasonable efforts to determine the process actually used.

2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be on the alleged infringer only if the condition referred to in subparagraph
(a) is fulfilled or only if the condition referred to in subparagraph
(b) is fulfilled.

3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their manufacturing and business secrets shall be taken into account.

This provision of the TRIPs Agreement seeks to exempt suits for infringement from the application of the traditional rule of the Evidence law; that he who asserts a fact must prove it. The provision seeks to shift the burden of proof on the defendant in a suit for infringement. This implies that the defendant in a suit for infringement shall be presumed to be guilty of such an act unless he is able to prove the contrary. This was indeed a very bold step that the TRIPs agreement sought to achieve in its member nations. Apart from this the agreement also made provision for product patents in pharmaceutical drugs and for the mailbox system for filing of patent applications.

The TRIPs Agreement and the Indian Patent Act:

Of all the seven categories of intellectual property covered by the TRIPS agreement it is only in the area of patents that the norms and standards of protection envisaged in TRIPS agreement were significantly different from India's own policies, laws and regulations. Before we understand the amendments made by the Parliament in the Patent Act to improve the patent enforcement measures, it is important to look at the differences which existed between the Indian Patents Act and TRIPs Agreement. The following table brings out contrast between these two:

TRIPs and Indian Patents Act (IPA) a comparison
TRIPs IPA
Grant of Patent Prescribes three conditions if satisfied, both process and product patents to be granted in all industries
Only permits process patents for food, medicines, drugs, chemicals, micro-organisms and seeds
Duration of Patent Uniform 20 year duration 5 years from date of sealing or 7 years from date of patent

Compulsory Patent

License can be given only in case of national emergency. For practical purposes, it cannot be given An application can be made after 3 years from grant of patent.

Life form Patents

Requires patenting of microorganisms, non- biological and microbiological processes. Prohibits patenting of life forms or farming techniques.

Onus of proof
Places the burden of proof on the infringer or the defendant Onus of proof lies on the patentee or applicant.

The Amendment to the Indian Patent Act:

Pursuant to its obligations under the TRIPs Agreement, the Indian Parliament introduced various amendments in the Patent Act and the corresponding Patent Rules in 2002(also in 2005) and 2006 respectively. The most significant amendment introduced in the Act by the 2002 Amendment with regard to the enforcement of patents was the introduction of Section 104-A. The section reads as follows:

104-A: Burden of proof in case of suits concerning infringement

(1) In any suit for infringement of a patent, where the subject-matter of patent is a process for obtaining a product, the Court may direct the defendant to prove that the process used by him to obtain the product, identical to the product of the patented process, is different from the patented process if, -
(a) the subject-matter of the patent is a process for obtaining a new product; or
(b) there is a substantial likelihood that the identical product is made by the process, and the patentee or a person deriving
title or interest in the patent from him, has been unable through reasonable efforts to determine the process actually used:
Provided that the patentee or a person deriving title or interest in the patent from him, first proves that the product is identical to the product directly obtained by the patented process.

(2) In considering whether a party has discharged the burden imposed upon him by sub-section (1), the court shall not require him to disclose any manufacturing or commercial secrets, if it appears to the court that it would be unreasonable to do so.?

With this new amendment of reversal of burden of proof on process patents, it is increasingly considered prudent to possess a process patent to ward off potential process infringement suits. According to this amendment, the defendant in a suit for infringement would be expected to prove his innocence rather than the plaintiff proving his guilt.

Apart from the introduction of this breakthrough amendment in the Act, the government has also undertaken to revamp the offices of the Controller General of Patents, Designs and Trademarks. An enormous amount of modernization and computerization is being carried out in the patent offices, apart from speeding up the legal process. The patent offices are being modernized by the government with the use of the Patent Information System (PIS), based in Nagpur. These improvements in the patent offices are fallout of the realization that patent enforcement cannot be strengthened without effective patent infrastructure.
This new patent law that India has put in place has brought the Indian patent regime further into line with international norms. The changes provide new and powerful incentives for investment, both foreign and domestic. The operation of the patent offices in handling patent applications has also been improved. A patent can now be granted in less than three years, as opposed to an average of five to seven years, which it used to take only a few years ago.

Enforcement measures available under the Indian Law:

A patentee should consider the backlog generally in Indian courts. The patentee may file an action for patent infringement in either a District Court or a High Court. Whenever a defendant counter-claims for revocation of the patent, the suit along with the counterclaims is transferred to a High Court for decision. Because defendants invariably counterclaim for revocation, patent infringement suits are typically heard by a High Court only. According to patent law in India, the High Court may allow the patentee to amend the application in order to preserve the validity of the patent. In such an event, the applicant must give notice to the Controller, who may be entitled to appear and be heard and shall appear if so directed by the High Court.

If a patentee is successful in proving its case of patent infringement, and if the defendant does not comply with the judgment, a petition for contempt of court can be filed. Contempt of court is a criminal offense, while patent infringement is a civil offense. In the event of a contempt of court, Indian law provides for imprisoning the authorized person(s) of the defendant. It is also possible to obtain a preliminary injunction, although the above-noted judicial backlog should be considered. The basis upon which a preliminary injunction is granted is whether the plaintiff shows a prima facie case and also whether the balance of "convenience" is in the plaintiff's favor.

However, an important consideration before enforcing a patent in India is to ensure that the patentee has worked the invention directly or through its licensees in India. If a patentee has not worked the invention in India, then the defendant could seek a compulsory license under Section 84(1)(c), if the patent has been in force for more than three years. In addition, if a compulsory license is already in place and the patentee has still not worked the invention but yet asserts it, the defendant can seek a revocation of the patent under Section 85(1) of the Patent Act.

As to other enforcement considerations, a new change in the law allows for damages from publication of the application, except for Black Box applications. The Recent Amendment has limited the remedy available to an owner of a patent issuing from a Black Box application. In particular, a company, which has made "significant investment" and was marketing the product before January 1, 2005, may continue to do so but must pay a "reasonable royalty" to the patentee.
Shortcomings of the system:

The above-mentioned improvements in the patent regime in India have resulted in a significant up thrust in the promulgation and enforcement of patents in India. However, a lot remains to be achieved still. The patent regime is plagued with certain major impediments, which continue to hinder the effective enforcement of patents in the country.

One of the most significant impediments to the effective enforcement of patent rights in India is the acute lack of awareness of patent basics in the judiciary and even the legal fraternity. A patent infringement is first to be filed in a District Court. With a counter-claim of invalidation, the suit moves to the High Court. Unlike in advanced patent litigation countries like USA, Europe or Japan, the awareness and understanding of grounds of infringement, exceptions to infringements etc. are also poor and vague in India. Another important aspect is that no time frame is prescribed for legal recourse, unlike in EU & US. Judicial delays mean that the cases can take up to ten years to se resolution and payment of damages on patent infringements. The pendency of patent cases, especially of the main suit, is likely to remain a deterrent for enforcement.

Moreover, there is no criminal remedy available for infringement of patents, as opposed to that of copyrights etc. This often leads to insufficient remedy in the infringement suits. Also, the lack of criminal remedies fail to deter potential infringers from committing such acts in future.

Apart from these legislative and judicial shortcomings, the patent regime also suffers from certain serious administrative problems. Though improved, the speed at which a patent application is granted still remains largely slow. The Indian Patent Office is faced with a growing backlog of approximately 40,000 unexamined patent applications.

Subsequent to these amendments, India can boast of one of the best patent law regimes in the world. The problem, however, still lies entirely in the inadequacy of the enforcement machinery and the slow judicial process.

Conclusion:
Though India has improved its patent regime in some respects, it remains weak in many areas largely due to inadequate laws and ineffective enforcement. Despite the amendments made in the laws, a lot is desired still in order to bring the regime at par with the international standards.

The amendments without doubt usher a welcome improvement in the enforcement area. In particular, the reversal of burden of proof provision enables higher rate of success to the patent holder and acts as a deterrent to potential infringers.

With the introduction of this provision, many corporates in India are now opting for defensive patents. Such corporates would prefer not to push on infringement related enforcement actions.

In the light of the above discussed enforcement climate, India might se increasing practice of voluntary licensing, Patent related alliances and co-working relationships. Provisions in the Patent Act for the working of a patent in India, compulsory license provisions, government use provisions, provisions for both pre-grant and post-grant oppositions (which is unique to India), and multiple grounds for revocation of a patent in India are likely to create an atmosphere of conciliation, compromise and co-working rather than confrontation.
Improving IPR protection will be an important element to increasing and making the climate in India more attractive to private investment.

More Topics On Patent:
Product Patent for the Indian Pharmaceutical Sector under the TRIPS regime
What is patent
Patent Protection in the field of Nanotechnology
Patent Amendment Act, 2005- An Over View:
 

The author can be reached at: sneha_venky@legalserviceindia.com / Print This Article

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