Ordinance to amend the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015

Government has notified an ordinance on May 3, 2018 to amend the Commercial Courts, Commercial Division and the Commercial Appellate Division in High Courts Act of 2015. The main Highlights of the Ordinance are:-

  • The pecuniary jurisdiction of the Commercial Courts’ has been widened. The value of subject matter of suit shall not be less than 3 lakhs in place of Rs. 1 crore.
  • With respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level.
  • With respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary-jurisdiction exercisable by the District Courts, as it may, consider necessary.
  • Except the territories over which the High Courts have ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, designate such number of Commercial Appellate Courts at District Judge level, as it may deem necessary, for the purposes of exercising the jurisdiction and powers conferred on those Courts under this Act
  • A suit, which does not contemplate any urgent interim relief under the Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.
  • lf the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties to the dispute and the mediator
  • The appeals from the judgments and orders of such ‘Commercial Division’ shall lie before the Commercial Appellate Division of the concerned high court
  • Any person aggrieved by the judgment or order of a Commercial Court below the level of a District Judge may appeal to the Commercial Appellate Court within a period of sixty days from the date of judgment or order.
  • The ordinance also inserts a new provision empowering the Central government to lay down rules for implementation of the Act
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Patent Agent Examination to be conducted before December, 2018

As per a  recent notice issued by the Office of Controller General of Patents, Designs and Trademarks (CGPDTM), the Patent Agent Examination is likely to be conducted before December, 2018. Detailed information will be made available on official website http://www.ipindia.nic.in after finalization of schedule and other official requirements.

 

Writ seeking directions for UOI to enforce norms relating to “working” of patents disposed

A Public Interest Litigation (PIL) was filed at the Delhi High Court under Article 226 of Indian Constitution as a writ of mandamus (Shamnad Basheer Vs. Union of India (UOI) & Others) seeking directions for the Union of India (UOI) to perform their statutory duty to enforce norms relating to “working” of patents under Section 146 read with Rule 131 of the Patents Act.

The Court had, vide an order dated 15th March, 2018, directed the union of India to place before the Court a reasonable timeline within which amendments as may be deemed necessary for strict implementation of the working statement requirement be effected with the consultation of stakeholders.

A Stakeholder consultation meeting in this regard has already taken place at Delhi, on 6th of April 2018. The UOI has proposed approximately 11 months to have any proposed amendment notified in the Form (Form 27) and the rules.

The proposed timelines by the Union were accepted by the court and the writ Petition has been disposed off vide an order dated 23rd April 2018. The ministry was also directed to make every effort to ensure that there is no deviation in the same and the matter is treated in right earnest and given the seriousness which it deserves to be accorded to it.

Rule 138 and 137 can be invoked for all National phase applications filed in India prior to Patent [Amendment] Rules, 2016

The Hon’ble High Court of Delhi in a recent order in a writ petition held that where an Indian National Phase Application has been filed prior to the Patent [Amendment] Rules, 2016, the unamended Rule 138 shall be invoked and not the amended Rule 138. It is pertinent to mention here that the amended Rule 138 incorporates Rule 20(4)(i) as an exception i.e. the amended Rule 138 cannot be invoked by the Controller to condone any delay in filing national phase application.

The Court further held that prior to the amendment of Rule 138 applications for extensions or condonation of delay sought under the 2003 Rules, were treated, as an irregularity under Rule 137.

The Court has held that where a request for examination of the patent application has been made before the expiry of the prescribed time period and is returned only for the reason that the fees is not paid in the prescribed mode and manner and such order has been complied by the petitioner. The request shall be deemed to have been filed within the prescribed time period.

In the instant case, the petitioner filed an application for grant of patent in India corresponding to PCT/FR/2014/050623. The petitioner entered the Indian National Phase on 06th November, 2015 while the prescribed time period of 31 months for filing the Indian National Phase Application ended on 20th October, 2015. In light of delay the petitioner filed petitions under rule 137 and 138.

The first issue to be adjucated by the Hon’ble Court was whether the sustainability of application filed on behalf of the petitioner to enter the Indian National Phase under Rule 20(4((i) of the Patent Rules would be examined in light of amended as against unamended Rules.

The amended rule 138 confers power on the Controller to extend time period for a period of one month for condoning the delay in doing any act or taken any proceedings, provided such request is filed prior to the expiry of the prescribed time period. The amended Rule 138 excludes certain deadlines that cannot be condoned under said rule, one of such deadline being rule 20(4)(i) which stipulates time period for filing National Phase Application as being 31 months.

The difference between amended and unamended rule 138 is that the unamended rule 138 does not exclude rule 20(4)(i). The court held that since the National phase application was filed by the petitioner prior to the Patent [Amendment] Rules, 2016, the unamended rule 138 shall be invoked and the Controller has powers to condone delay in filing the National Phase Application within the prescribed time period. Therefore in such case an irregularity for which there is no special provision in the Act can be corrected under Rule 137. Rule 137 confers powers to the Controller to correct any irregularity in procedure. It is for this reason that the petitioner has filed petitions both under rule 137 and 138.

The second issue adjucated by the Court was whether the Controller ought to have processed the request made by the petitioner for examination once the requisite fee was paid by it in the prescribed mode.

In this case the request for examination was filed by the petitioner along with a prescribed fee in the form of banker’s cheque. The Controller rejected said request on the ground that the same was not made in the prescribed mode and manner. The Act requires the Applicant to pay fees only be paid via Demand Draft/ Banker’s Cheque or Cash and transmitted via electronic mode. This communication asking the petitioner to pay the fees by correct mode reached the petitioner only after the expiry of due date of filing the request for examination and the petitioner thereafter within a matter of less than a week paid the fees via the prescribed manner and mode. The Controller rejected the request again on the pretext that the subsequent payment was received after the stipulated time period. The Court held that the Controller erred in rejecting the request for examination for failure of complying with the statutory time limit of 48 months, for the reason that the request was actually made before the expiry of said time limit and was only returned for the reason that the fees was not paid in the prescribed mode and manner. Further, since the first communication rejecting the request was received by the petitioner only after the expiry of stipulated timer period, steps to correct the same could only be taken thereafter. As a result, the Court directed the Controller to take request for examination on record and process the same in accordance with the Act.

Post grant Opposition filed on or before one year of publication under of grant is maintainable

In a recent decision, Asstt. Controller of Patents and design, Dr. Rachna Yadav has held that a post grant Opposition filed at the Indian Patent office on or before the expiry of one year of publication of grant under section 43(2) is maintainable.

Two Oppositions were filed on 30.03.2017 and 31.03.2017 by the Opponents, Shantha Biotechnics Private Limited and Biological E. Limited, respectively, under Section 25(2) of the Patents Act against Panacea’s Patent number IN272351. On 5th April, 2017, the Patentee was served with a copy of the notice of opposition and evidence by courier service, by e-mail on 27th April 2017 and by speed post on 1st May 2017 (agent of Patentee) and 2nd May 2017 (Patentee).

The Patentee filed an Interlocutory petition that the opposition is not maintainable as the Patentee has been served with the post grant opposition by email as well as speed-post by letters dated 28th April, 2017 which are beyond the prescribed time.

The Controller noted that section 25 (2) requires that a post grant opposition be filed at the Indian Patent Office on or before the expiry of one year of publication under section 43(2) i.e., before 1st April 2017. The same has been done in the present case.

Further, the Controller held that the Patentee has admitted to the fact that the copy of Opposition (including written statement, evidence and notice) was received on 5th April 2017 by courier, and later by e-mail and speed post. The Controller held that the Patentee has admitted that they have received the Opposition, by not one but several modes and the opposition has been timely filed at the Indian Patent Office as per the timeline of Section 25(2), the opposition is therefore maintainable.

 

Annual report for the financial year 2016-17 published by the IPO

The Indian Patent Office (IPO) has published the Annual report for the financial year 2016-17 (based on data from 1st April 2016 to 31st March 2017).

As per the Annual report, as a result of the various procedural reforms implemented during the year, the office of CGPDTM has made remarkable achievements in terms of delivery of IP services and IT-enabled functioning during 2016-17. The following are some of the noticeable achievements for Patents:-

  • The number of patent applications examined increased by 72.2%
  • Number of grant of patents increased by 55.3%
  • Final disposal of applications increased by 37.7%, as compared to 2015-16
  • During the year, online filing has increased to 90% in patents
  • Domestic filing show 1.2% increase as compared to 2015-16.

The following are some of the noticeable achievements for Trademark and Designs:-

  • Pendency of examination of trademark applications has been brought down from around 14 months to less than 1 month in January 2017.
  • Procedural reforms in examination resulted in increased acceptance of trademark applications for publication from less than 10% to about 40%.
  • In Designs, pendency in examination of new applications has reduced from 8 months in March 2016 to one month in March 2017.
  • During the year, online filing has increased to 80% for trademarks.

Other important facts for patents that can be inferred from the report are as follow:-

  1. During the year, the office examined 28,967 patent applications as compared to 16,851 applications during the previous year. Thus, there has been about 72% increase in the number of patent applications for which first examination reports were issued, as compared to the previous year.
  2. Also, during this year 30271 applications (Requests for examination) were disposed of as compared to 21987 in the previous year, which shows 39.7% increase during 2016-17.
  3. Further, filing of Requests for the examination has increased by 7.2% from 36960 in 2015-16 to 38578 during 2016-17.
  4. The total number of patents granted during the year was 9,847 out of which 1,315 were granted to Indian applicants. Out of the total granted patents, 2,673 patents were granted to applications relating to the Chemical and related fields, 1,939 to Mechanical, 1,049 to Computer Science and Electronics, 805 to Communication, 551 to Pharmaceuticals, 579 to Electrical, 333 to Biotechnology etc.
  5. By way of representations, 206 pre-grant oppositions were received in the office and 18 pre-grant oppositions were disposed of during the year.
  6. Also, 12 post-grant oppositions were filed during the year. 12 post-grant oppositions were disposed of during the year and 160 cases remained pending for disposal by the end of the reporting year.
  7. During the reporting year, the Office initiated expedited examination of patent applications filed by Applicants for ISR/IPER before Indian Patent Office as ISA and Startups as per provisions of Rule 24(C) of the Patents (amendment) Rules 2016.
  8. 135 requests for expedited examination of applications were filed during the year which included 103 Request from ISA Applicants and 32 requests from Start ups.
  9. Top 5 Indian applicants for patents are Indian institute of technology, Wipro limited, Council of scientific and industrial research, Mahindra & Mahindra limited, Bharat Heavy Electricals Ltd.
  10. In the field of Information technology, Wipro Limited occupied the top place in the reporting year while Tata Consultancy Services Limited was at the second place
  11. Amongst institutes and universities, this year, the Indian Institute of Technology (collectively) occupied the first position while, Amity University & Indian Institute of Science occupied second and third place respectively.

The report also highlights the following improvements that have been brought about in the functioning of Patent Office by Patents (Amendment) Rules, 2016 and other reforms implemented during 2016:

    • Streamlining timelines for disposal of patent applications,
    • Creation of Startup as a new category of applicant and facilitating Startup applications with 80% Fee concession,
    • Expedited examination of patent applications filed by startups and the applicants selecting Indian Patent Office as ISA/IPEA for their PCT applications,
    • Withdrawal of application before the issuance of the First Examination Report, if applicant is not interested in pursuing examination of his application filed for patent and refund of fees paid for Request for Examination allowed.
    • Hearing through Video-conferencing or audio-visual communication devices is allowed on request made by applicant at all Patent Office locations.
    • Adjournments of hearing in opposition proceedings has been restricted to maximum two by each party, which will help to dispose of the matters in time. It is also provided that each adjournments shall not be more than 30 days.
    • Mandatory online filing by patent agents in order to speed up digitisation and processing of patent applications.
    • PCT applicant can now delete some claims while entering the national phase entry in India
    • Fees for sequence listings has been reduced with the maximum fee put at INR 1,20,000.
    • Auto- allocation of Requests for examination: This system has brought in a single group-wise queue of Requests of Examination to have uniform examination at all patent Office locations with respect to date of filing of Request of examination.
    • E-Communication: First Examination Reports are sent through e-mail. Hearing notices are also sent through E-mail. This helps in speeding up the procedures.
    • Automation of Patent grant certificates: Certificates are generated and transmitted to the applicant on the registered email and made available on the official website. Same can be downloaded and printed as desired by the applicant.
    • Patent Search System: A login-free online public search facilities for patents, “Indian Patent Advanced Search System (InPASS)”, having full text search capability, already in practice have been updated during the year to further streamline the search system.
    • Electronic payment gateway for PCT application fees has been introduced from 1st April 2016 to avoid delay in transmission of fees for PCT applications to International Bureau and International Searching Authority.
    • Dynamic utilities: Many dynamic utilities on patent are available in the IPO website for the benefit of public like displaying the status on disposal of patent applications by the respective examination groups during the specified period, viewing “First Examination Report (FER)” issued (Jurisdiction and Group-wise) at all locations of Patent Office etc.

Definition of “start-up” under the start-up India initiative

Ministry of Commerce and Industry through a notification clarified the definition of start-ups under the start-up India initiative. An entity as per this notification shall be considered as a Startup if it fulfills all of the following:

  1. Upto a period of seven years from the date of incorporation/registration, if it is incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India. In the case of Startups in the biotechnology sector, the period shall be up to ten years from the date of its incorporation/ registration.
  2. The turnover of the entity for any of the financial years since its incorporation/ registration has not exceeded Rs. 25 crore.
  3. The entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.

The notification clarified that an entity formed by splitting up or reconstruction of an existing business shall not be considered as a startup.

The process of recognition of an eligible entity as startup has also been provided which is as follows:

  1. A Startup has to make an online application over the mobile application or portal set up by the Department of Industrial Policy and Promotion.
  2. The application shall be accompanied by—
      1. a copy of Certificate of Incorporation or Registration, as the case may be, and
      2. a write-up about the nature of business highlighting how it is working towards innovation, development or improvement of products or processes or services, or its scalability in terms of employment generation or wealth creation.

The Department of Industrial Policy and Promotion may, after calling for such documents or information and making such enquires, as it may deem fit, recognise or refuse the eligible entity as a Startup.