Feb 7, 2023 | Indian Patents Act 1970, Key Terms of Patents Act
The objective of the Patent system is not only to grant a monopoly right to the patentees but also to ensure that the granted patents are commercialized or worked in India without undue delay. The term The word “working of the patent” means that the patented invention shall be commercialized, in order to meet reasonable requirements of the public and patented products are available at reasonable price to the public. Patents are granted to enhance industrial development and, therefore, should be worked in its fullest extent within the territory of India.
Patentee or licensee shall inform Patent Office every year about working of his patent by submitting the statement of working. It a statutory obligation of the Patentee/licensee to provide the declaration regarding the patent commercialization status to the Patent Office. The onus is on the patentee or licensee to state the working status of the patent and to pay the renewal fee annually until the lifetime of the patent. Failure to submit the statement of working may create a presumption of non-working of the patent, which may be one of the grounds for third parties to apply for compulsory license.
Legal Perspective
Section 83 in The Patents Act, 1970 states
(a) that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay;
(b) that they are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article
To oblige to Section 83, Section 146 of the Indian Patents Act, 1970, states the “Power of Controller to call for information from patentees” which mandates that the Patentee/licensee shall furnish the details of the working status of the patented invention in India for the respective financial year.
The statement of working of patents is furnished through Form 27 as prescribed in the Second schedule of the Patents Act, 1970 read with Rule 131.
The information to be submitted includes:
- Information whether the patent was worked in India during the year
- If worked, the value generated
- If not worked, a brief reason for not working and steps being taken to work the invention
- If manufactured in India or imported from other countries
- Licences and sub-licences granted during the year
There is no fee to file Form 27 and from the year 2012, the working of Patents filed by Patentees are made available to public (E-Register) by the Indian Patent Office.
Initially, Form 27 to be filed within 3 months from the end of every calendar year i.e., March 31st of each year. However, the amendments to the Patent Rules, 2020, the Form 27 shall be furnished within 6 months from the end of the financial year. As per the amended rules, the due date to file the statement of working via Form 27 is September 30th of each year for the preceding financial year.
Implications
Any failure in furnishing of the working of patents des not invalidate the Patent but have the following consequences:
- Considered as a punishable offence that includes a fine that may extend up to 10 lakh rupees
- Furnishing wrong information is punishable offence with imprisonment up to six months, or with fine or both
- Patent can be revoked on the ground of non-working
To conclude, the statement of working of patents creates a transparency in providing the status of commercialization of the patented invention, provides an updated information of the patented inventions to the interested person, value of the patented inventions, the adequate steps taken by the Patentee/licensee to work on the patented invention, encourages the innovators and their interest in trade and business in the fields of science and technology.
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Feb 7, 2023 | Indian Patents Act 1970, IPR & Business, Key Terms of Patents Act, Patent, Startups
As per the Indian Patent Law, one patent application shall relate to a single invention. However, if more than one invention is to be claimed in a single application, it is necessary to establish that the inventions so claimed in a single patent application have unity and they form a single inventive concept. The golden rule is that the claim (s) of a complete specification shall relate to a single invention, i.e. the concept of unity of invention shall be there.
According to Section 10 of the Patents Act 1970, if claims refer to a group of inventions, such inventions shall form a single inventive concept. The claims shall be clear and succinct and shall be fairly based on the subject-matter disclosed in the specification and moreover, a single inventive concept may be recognized between independent claims of different categories.
The invention comprising a polymer, process to prepare polymer and commercial utility of polymer can be claimed in the single patent application because even though the invention has three main components, all of them relate to a single invention and have unity. On the other hand, the invention relating to two independent formulations used to treat cancer and HIV/AIDS shall not be claimed in a single patent application as both formulations are independent of each other and hence lack unity of invention.
The purpose of this requirement of unity of invention is administrative, as well as financial. That is, the requirement serves to prevent the option of filing one patent application for several inventions, while paying only one set of fees, such as, fee for filing application, examination, early publication or annual renewal etc. Moreover, the concept of unity of invention also makes the technical classification easier.
Under Section 16 of the Indian Patents Act, 1970, if a single patent application has been filed with more than one invention and inventions so claimed lacks unity, the applicant shall be required to divide main application into divisional application (s). However, the further application (divisional application) and the complete specification accompanying it shall be deemed to have been filed on the date on which the first mentioned application had been filed, and the further application shall be proceeded with as a substantive application and be examined when the request for examination is filed within the prescribed period.
However, during the process of examination of the patent application, the examiner may also ask the applicant to divide the application into two or more applications and file divisional application. It is interesting to note that both parent application and divisional application will have the same priority date though divisional application is often filed later than parent application. For example:
- Date of filing provisional application and priority date: 15th November 2006
- Date of filing complete specification: 13th November 2007
Publication and examination of the patent application takes place and the Controller raises the objection that the invention lacks unity of invention and hence the application shall be split into two applications i.e., main parent application and divisional application. Here, the date of filing divisional application will be 10th Jan 2009.
In such a case, both parent application and divisional application will have priority date of 15th November 2006 even though the divisional application was filed 10th Jan 2009, which also mean that both parent application and divisional application expire on the same date irrespective of the date of filing.
A specification in respect of a divisional application under section 16 shall contain specific reference to the number of the original application from which the divisional application is made. The request for examination in case of divisional application shall be filed within 48 months from the date of filing or priority of the parent application or within six months from the date of filing the divisional application, whichever expires later. Request for divisional application shall be filed only after filing request for the parent application to ensure the requirement of section 16(3).
Moreover, the complete specification of a divisional application should not include any matter not in substance disclosed in the complete specification of the first application. The reference of parent application should be made in the body of the specification. A divisional application has to be filed before the grant for a parent application.
Though it sounds economical to club multiple inventions together and file for a single application, it is logical to follow the concept of unity of the invention and ensure that separate applications are filed for each invention.
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Feb 7, 2023 | Indian Patents Act 1970, IPR & Business, Startups
Intellectual property (IP) is a term referring to creation of human mind in the form of a number of distinct types of expressions for which a set of rights are recognized under the corresponding regimes of law. Innovation plays vital role in sustainable growth of an organization and securing the organizations IP assets through proper planning is essential for utilizing the IP assets later for commercial success.
In case of Indian IT industry, whether it is into services or products or both, IP typically means patent, copyright, design, confidential information, trade secret, brand name and domain name etc., wherein handling confidential information or trade-secret needs a lot of care for the reason that it is not registered and moreover, we don’t have adequate laws to protect them. Though there are several IP related issues, however, drawing line between proprietary IP and client’s IP may become a challenge at times, especially when the company is bound by stringent agreements.
IP policy in simple words, is a guideline that defines IP as per company’s business; provides guidelines for creation, protection, exploitation, disclosure, ownership of IP; sensitizes employees about aspects of IP and at the same time guides them regarding the precautions that need to be taken to safeguard company’s IP as well as prevent or minimize IP infringement risk. IP policy also provides guidelines and procedures for disclosure & non-disclosure of intellectual property whether protectable or not; and to develop and enhance environment of innovation and generate creative & novel IP compatible with business goals of the company.
Coverage of policy
Typically an IP policy is applicable to the employees of the company; however, if company works with outside vendors, Freelancers or consultants etc, coverage of policy may be extended to them as well as they have to be involved in the process of creating IP for which ownership and confidentiality issues need to be addressed clearly in the policy.
Meaning of IP
Defining meaning of IP, depending upon core area of business is essential. IP may include Patent, Copyright, Trademark & Domain name, Design, Confidential information or trade-secret that might be proprietary in nature or created by employees during course of employment or by the consultants as a part of contractual relationship with the company. The kind of IP that shall be included in the definition purely depends upon business area and strategies of the company.
“Sensitization of the employees on confidential information and consequences of misappropriating is necessary from time to time. Whom to disclose, when to disclose, how to disclose such information, shall be made clear in the policy. Liability of the employee during course of employment or even after termination or resignation must be dealt with carefully.”
Ownership
Since IP is created by the employees during the course of employment, company would prefer having ownership of such IP with itself. However, in case of patent, the application for a patent shall be filed by true & first inventor, its assignee or legal representative. Therefore, it is extremely important to list out the inventors whose names are going to appear on the patent application, right in the beginning of the project to avoid arising of disputes later on. However, inventor may further assign rights to the company; so that ownership of the patent is with the company. Similarly, in case of copyright, applicant is the company and the employee who creates the work is called as author. When company decides to file application for copyright registration, the author (s) is required to give NOC (No Objection Certificate) to the Copyright Registry stating that he/she has created the work during course of employment and he/she has no objections if the work gets registered in the name of the company. However, proprietary IP, confidential information is exclusive property of the company unless company specifically authorises employee to disclose, use or own it.
Security and confidentiality
Even though most of the organizations have implemented multiple security measures to prevent the loss, misuse and alteration of any confidential information under its control, employees must strictly follow the security measures, which are extremely crucial to secure technical and business information of the company. First of all identification of trade-secrets is very important and it can be best protected by segregating it into low, moderate and high confidentiality type and further by limiting access to it. Employment and non -disclosure or confidentiality agreement may further be used as tools to safeguard confidential information of the company. Labelling documents as “Confidential” is an appropriate way of communicating information as Confidential and serves as an express notice to indicate nature of the document.
Sensitization of the employees on confidential information and consequences of misappropriating is necessary from time to time. Whom to disclose, when to disclose, how to disclose such information shall be made clear in the policy. Liability of the employee during course of employment or even after termination or resignation must be dealt with carefully.
Record of work
Systematic & periodic record of work, research, ideas is extremely critical to serve as an evidence to establish ownership (copyright) or inventorship (patent or design) and date on which intellectual property was created or developed by employee. It could also be helpful to find out infringement of intellectual property, if performed by an employee. Record book shall not be permitted to be taken outside the premises of the company and crucial data or descriptions should be signed and dated by the creator, supervisor, or coordinator of the project.
Liability of employee
Before expecting employees follow the IP policy, they shall be explained essential clauses of NDA and employment agreement that they sign at the time of joining. This will sensitise them about their duties as well as liabilities towards the company. At the time of termination or resignation, exit interview must be conducted and copy of agreements signed at the time of joining must be handed over to the employee to remind him his responsibilities as well as liabilities. Getting confidential or any sensitive information from prior employer and incorporating such information in the work may land up in a very undesirable condition and any such practice must be strictly discouraged by the company.
Idea Disclosure
As far as patents are concerned, the process starts with conception and disclosure of idea. Here again, the activities such as whom to reveal the idea, how to take idea forward, effort needed to convert idea to executable invention, defining inventors, royalty percentage or reward upon commercialisation of the idea, are few of the critical issues that must be addressed in the IP Policy. However, maintaining confidentiality of idea, documentation, assessment of novelty and business relevance of idea and discussion with patent attorney, filing for patent in India or foreign country requires documentation of the process so that there is coordination between date of filing a patent application and disclosure in the form of product launch. Moreover, in the process of patenting, there are several critical timelines and fee that need to be marked and updated from time to time.
IP Policy is important for any organization today and it is helpful to document the way company handles its IP, liability of employees and confidentiality/security of knowledge and data.
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Feb 1, 2023 | Indian Patents Act 1970, Key Terms of Patents Act
Person interested under Section 2 [Definitions and interpretation] of Indian Patents Act 1970 is a person (legal or natural), who has some concern or interest in the patent/application for the reason of being in the same area of technology. It includes a person engaged in, or in promoting, research in the same field as that to which the invention relates. Person interested includes a person engaged in, or in promoting, research in the same field as that to which the invention relates.
For example, if applicant who filed the patent application is a company, Nokia [legal person or entity] that is in the business of mobile phones, the person interested in its patent may be its competitors involved in the same business of mobile phones such as Motorola or Sony Ericson i.e., person who is engaged in or doing research in the same area, which invention of Nokia relates to.
Person interested has an important role to play in law of patents. Some of the actions that a person interested can perform are:
- File for post-grant opposition for the patent
- Request for examination of patent application on behalf of the applicant.
- File petition for revocation of a patent
- Apply for compulsory license
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Jan 23, 2023 | Patent
United States Patent and Trademark Office (USPTO) is considered to be one of the most lucrative destinations for the applicants to file for a patent for various reasons. Business opportunities in US are better than any other jurisdictions; enforcement of patent rights is effective; time taken for patent grant is less; US market is mature for buying or selling of patents; & US patent is valued more by the investors. For all these reasons, when the applicant wants to file patent application both in India and US, the biggest dilemma he has is where to file for a patent first, in India or US? Problem becomes bigger if the applicant does not want to file for a patent in India at all and directly wants to file in the US without pursing Indian filing.
In this article, we will explore the advantages of filing for a patent in India first, and consequences of filing directly in US first if the applicant is a resident of India.
Filing in India first makes sense (U/S 39)
Before taking a decision on where to file first, it is essential to understand what Indian Patent Laws say about foreign filing of a patent. The issue is sensitive as well as critical and lack of expert legal advice on the same may have fatal consequences.
According to Section 39 (Residents not to apply for patents outside India without prior permission) of the Patents Act 1970, a person who is resident of India may file for a patent in the US or any other foreign country by 2 ways:
- The first option is to file a patent application in India first, wait for 6 weeks and then go for foreign filing or PCT (Patent Cooperation Treaty) application filing, as the case may be. After filing the patent application in India, if the applicant does not get any objections from Indian Patent Office within 6 weeks from the date of filing, this indicates that the Controller does not have any objections with respect to foreign filing and applicant can file application outside India.
- The second option is to take Foreign Filing Permission (FFP) on Form-25 [Request for permission for making patent application outside India] from the Controller of patents, if the applicant does not want to file patent application in India and wishes to go for foreign filing directly. Prescribed fee to be paid along with Form 25 is 1600 INR for natural person/start-up/small entity and 8000 INR for others except natural person/start-up/small entity for e-filing and ten per cent additional respectively in case of filing by physical mode. This permission is usually granted by the Controller within 21 days from the date of request. So, if the applicant wants to file patent application in any foreign country without Indian filing, this Foreign Filing Permission (FFP) or Foreign Filing License (FFL) is required.
If the invention is relevant for defence purpose or atomic energy, the Controller shall not grant permission to file patent in foreign country without the prior consent of the Central Government. This section shall not apply in relation to an invention for which an application for protection has first been filed in a country outside India by a person resident outside India.
Who is “Resident of India”?
The term “Resident of India” has not been defined in the Patents Act, 1970 but according to Income Tax Act, an individual can be termed as a ‘Resident of India’ if he stays for the prescribed period during a fiscal year i.e. 1st April to 31st March, either for:
- 182 days or more; or
- Has been in India in aggregate for 365 days or more in the previous four years.
Any person who does not satisfy these norms is termed as a ‘Non-Resident’. A resident individual is considered to be ‘ordinarily resident’ in any fiscal year if he has been residing in India for nine out of the previous ten years and, in addition, has been in India for a total of 730 days or more in the previous seven years. Residents who do not satisfy these conditions are called individuals ‘not ordinarily resident’.
Rational behind filing in India first
Main rational behind having Section 39 is to safeguard national defence and security. If the invention is relevant for defence purpose or atomic energy, the Controller shall not grant permission for foreign filing without the prior consent of the Central Government. Secrecy Directions may be imposed on such application and the Controller may give direction for prohibiting or restricting the publication of such application if it appears to him that the invention in question falls in one of the classes notified to him by Central Government as relevant for defence purposes or the Controller himself considers it to be so. However, this section shall not apply in relation to an invention for which an application for protection has first been filed in a country outside India by a person resident outside India.
Do you lose anything by filing in India first?
It is a myth that by filing a patent application in India first and US later, one loses on the date and filing and patent filing in the US gets delayed. The fact is that even if you file for a patent in India first, you can file the same application in US (as convention application) immediately after expiry of 6 weeks from the date of Indian filing. Kindly note that patent application may be filed anytime before expiry of 12 months from the date of Indian filing to claim priority from the Indian application. At the time of filing in US, you can claim priority date from your Indian filing as both India and US are convention countries as per the Paris Convention. Effectively, this means that even though you file in India first and US later, the same date of priority can be maintained in USPTO as well. In-fact when priority is claimed from Indian filing, the applicant has to submit to USPTO, the priority document obtained from the Indian Patent Office.
Therefore, it actually does not matter where you filed first, but yes, it certainly is a better and a safe choice to either file for a patent in India first or take permission from the Controller for foreign filing.
Consequences of violating section 39
If a person makes or causes to be made an application for the grant of a patent in contravention of section 39, he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both. Hence, it is important to either file application in India first or take FFP from the Controller of Patents.
Conclusion
In the instances where the applicant or inventor is a resident of India, it is important to consider filing for a patent in India or taking permission for foreign filing from the Controller, before filing for a patent in foreign country or PCT for the reason that violation of this provision can lead to fatal consequences.
