BRIEF HISTORY OF INDIAN PATENT SYSTEM - Part 3; JUSTICE BAKSHI TEK CHAND COMMITTEE

After Independence, it was felt that the Indian Patents & Designs Act, 1911 was not fulfilling its objective. It was found desirable to enact comprehensive patent law owing to substantial changes in political and economic conditions in the country. Accordingly, the Government of India constituted a committee under the Chairmanship of Justice (Dr.) Bakshi Tek Chand, a retired Judge of Lahore High Court, in 1949, to review the patent law in India in order to ensure that the patent system is conducive to the national interest. The terms of reference included —

•  to survey and report on the working of the patent system in India,
• to examine the existing patent legislation in India and to make recommendations for improving it, particularly with reference to the provisions concerned with the prevention of abuse of patent rights
• to consider whether any special restrictions should be imposed on patent regarding food and medicine,
• to suggest steps for ensuring effective publicity to the patent system and to patent literature, particularly regarding patents obtained by Indian inventors,
•  to consider the necessity and feasibility of setting up a National Patents Trust,
• to consider the desirability or otherwise of regulating the profession of patent agents,
• to examine the working of the Patent Office and the services rendered by it to the public and make suitable recommendations for improvement, and
• to report generally on any improvement that the Committee thinks fit to recommend for enabling the Indian Patent System to be more conducive to national interest by encouraging invention and the commercial development and use of inventions.

The Committee submitted its interim report on 4th August, 1949 with recommendations for prevention of misuse or abuse of patent right in India and for amendments to a few sections of the Patents & Designs Act, 1911 on the lines of the United Kingdom Acts of 1919 and 1949. The main recommendations of the Committee were as follows:-

•  Any interested person may apply for a compulsory license or revocation of the patent on any of the following grounds, namely
• Patented invention, being capable of being commercially worked in India, is not being commercially worked therein to the fullest possible extent;
• Demand for the patented article in India is not being met to an adequate extent or on reasonable terms;
• Commercial working of the invention in India is being prevented or hindered by the importation of the patented articles; and
• The refusal of the patentee to grant a license or licenses on reasonable terms, whereby the commercial or industrial activities in India are prevented or hindered.

For obtaining relief against abuse of patent rights, an application can be made to the Controller of Patents and Designs any time after the sealing of the patent and the order of the Controller to be appealable before the appellate authority which should be an ad-hoc Special Tribunal nominated by the Central Government.

The committee also observed that the Patents Act should contain clear indication to ensure that food and medicine and surgical and curative devices are made available to the public at the cheapest price commensurate with giving reasonable compensation to the patentee.

Based on the above recommendation of the Committee, the 1911 Act was amended in 1950 (Act XXXII of 1950) in relation to working of inventions and compulsory license/revocation.

Further, following grounds were provided for making applications for compulsory license:

•  Patented invention, being capable of being commercially worked in India, is not being commercially worked therein to the fullest possible extent;
•    Demand for the patented article in India is not being met to an adequate extent or on reasonable terms;
• Commercial working of the invention in India is being prevented or hindered by the importation of the patented articles;
• The refusal of the patentee to grant a license or licenses on reasonable terms, the commercial or industrial activities in India are prevented or hindered;
• A market for the export of the patented article manufactured in India is not being supplied;
• The working or efficient working in India of any other patented invention which makes a substantial contribution to the establishment or development of commercial or industrial activities in India is unfairly prejudiced; and activities in India.

The time period prescribed for making the applications for compulsory license was "at any time after expiration of three years from the date of sealing". The application could also be made by the licensee. The term, 'patented article' includes any article made by a patented process. Other provisions were related to endorsement of the patent with the words 'license of right' on an application by the Government so that the Controller of Patents could grant licenses. In 1952, an amendment was made to provide compulsory license in relation to patents in respect of food and medicines, insecticide, germicide or fungicide and a process for producing substance or any invention relating to surgical or curative devices, through Act LXX of 1952. The compulsory license was also available on notification by the Central Government. Based on the recommendations of the Committee, a bill was introduced in the Parliament in 1953 (Bill No.59 of 1953). However, the bill lapsed on dissolution of the Lok Sabha. 

BRIEF HISTORY OF INDIAN PATENT SYSTEM - Part 2; INDIAN PATENTS AND DESIGNS ACT, 1911

In 1911, the Indian Patents and Designs Act, 1911, (Act II of 1911) was brought in replacing all the previous legislations on patents and designs. This Act brought patent administration under the management of Controller of Patents for the first time. The Act II of 1911 incorporated provisions of 1907 Act of UK. This act substituted the expression "Exclusive privileges" with "Patent". Further, the duration of Indian patent was made independent of duration of UK patent.

The Act II of 1907 was amended in 1920 to provide for entering into reciprocal arrangements with UK and other countries for securing priority. In 1930, further amendments were made to incorporate, inter-alia, provisions relating to grant of secret patents, patent of addition, use of invention by Government, powers of the Controller of Patents to rectify register of patent and increase of term of the patent from 14 years to 16 years. In 1945, another amendment was made to provide for filing of provisional specification and submission of complete specification within nine months.

BRIEF HISTORY OF INDIAN PATENT SYSTEM- Part 1

In India, a patent for invention has always found its roots in statutes of Indian legislature. The first Act relating to patent rights was passed in 1856 (Act VI of 1856) which granted certain exclusive privileges to inventors of new manufacture for a period of 14 years. The objective of the Act VI of 1856 was to encourage inventions of new and useful manufactures and to induce inventors to disclose secret of their inventions. The Act VI of 1856 was subsequently repealed by Act IX of 1857 since the Act VI of 1856 had been enacted without the approval of the sovereign, i.e., the British Crown. Fresh legislation for granting 'exclusive privileges' was introduced in 1859 as Act XV of 1859. This legislation contained certain modifications of the earlier legislation, namely, grant of exclusive privileges to useful inventions only and extension of priority period from 6 to 12 months. The Act XV of 1859 excluded importers from the definition of inventor. The Act XV of 1859 was based on the United Kingdom Act of 1852 with certain departures including allowing assignees to make application in India and also taking prior public use or publication in India or United Kingdom for the purpose of ascertaining novelty.

The Act XV of 1859 provided protection for invention only and not for designs whereas United Kingdom had been protecting designs from 1842 onwards. To remove this lacuna, the 'Patterns and Designs Protection Act' (Act XIII) was passed in 1872. This Act amended the 1859 Act to include any new and original pattern or design or the application of such pattern to any substance or article of manufacture within the meaning of 'new manufacture'. The Act XV of 1859 was further amended in 1883 by XVI of 1883 to introduce a provision to protect novelty of the invention, which prior to making application for their protection were disclosed in the Exhibitions of India. A grace period of 6 months was provided for filing such applications after the date of the opening of such Exhibition.

In 1888, new legislation was introduced to consolidate and amend the law relating to invention and designs in conformity with the amendments made in the UK (United Kingdom) law. 

The modifications introduced in the Indian law, by Act V of 1888, over the UK legislation, inter alia, include:

i. Shifting of authority to administer the Act, from Home Department to Secretary to Government of India;

ii. Extension of the jurisdiction of the Act to other courts apart from High Courts of Madras, Calcutta and Bombay;

iii. Reduction in the fee from Rs. 100 to Rs. 10 only at filing stags;

iv. Graduation of fee as to amend approximately with the increasing value with the invention acquires as it becomes more commonly known and used.

v. Provision for detailed disclosure of the invention, including best mode of working the invention in full clear, concise and exact terms, in order to enable any person skilled in the art to make use of the invention;

vi. Provision of powers to ask for a model of the invention;

vii. Change of time for filing petition in respect of patent granted in UK from 12 months from the 'letters patent' to 12 months from the 'date of sealing';

viii. Powers to extend the term of exclusive privileges by 7 years ordinarily and 14 years in exceptional cases.

ix. Provision for granting compulsory license where invention is not made accessible to public on reasonable terms;

x. Registration of Agents to encourage filing by foreign inventor;

xi. Introduction of provision for protection of new or original design; and

xii. Provision for counting the grace period for filing application for invention displayed in the Exhibition from the date of admission of the invention into the Exhibition instead of the date of the opening of the Exhibition.

INTELLECTUAL PROPERTY RIGHTS AWARENESS– A MUST FOR ALL START-UP

Whirlwind, tumultuous may be some of the many words that describe a start-up journey.  In any start-ups, legal compliances, team building, market research, product building, product testing, attracting investment and key partnerships, sales and marketing plans are classically top of the mind tasks for the founders. Amid all this activity, intellectual property most of the time is forgotten or evoked when it is too late. It is important to remember intellectual property is a business asset and has commercial value. Almost every startup has intellectual property, which provides a competitive advantage, embedded within it. Any business with a name, logo, advertisements, inventions, custom software, customer lists or a website has intellectual property and should understand how to protect it. It is highly recommended that start-ups companies should be proactive in developing and protecting their intellectual property for many reasons, including but not limiting to Protecting the competitive advantage, Leveraging as a marketing tool,  Increasing the value of start-up, Attracting investors,  Developing a revenue stream through licensing, Avoid infringement and costly lawsuits. 

Typically, intellectual property is often created during a company’s earliest stages and start-ups need to develop a specific, robust intellectual property strategy. Generally, there are three main types of intellectual property any start-ups may come across: patents, trademarks, copyrights.

Patents

A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem.  In order to be patentable, the invention must fulfill certain conditions such as.  The invention must be novel, that is, should not be known in the body of existing knowledge in its technical field, called “prior art". The invention must show an inventive step which could not be deduced or be obvious to a person with knowledge of the technical field. Finally, its subject matter must be accepted as "patentable" under law.

It should be remembered that not every startup business may benefit directly by investing in building a patent portfolio, but the question of whether to pursue patent protection requires a prompt and hard look. Although patents are expensive and time-consuming type of intellectual property to obtain, they also provide the best scope of protection. There are two main aspects that Start-ups should consider with respect to patents:

Firstly, patents provide a number of benefits to start-up. For example, a robust patent portfolio or a key patent can help attract investors, also may serve as an entry barrier against competitors. Furthermore, the filing of a patent application will enable the company to advertise "patent pending" along with its product or service. Finally, patents can also further help the finances of a business by providing an additional opportunity to generate revenue from licensing.

The second important aspect that Start-ups should consider is avoiding infringement of others patents, i.e., a defensive aspect. As a matter of practice, a patent search should be conduct by all Start-ups to authenticate that their intended industry and application is free of patents that may be used against them. The cost of performing this search is rendered worthy by the potential for huge savings, both in terms of litigation costs and wasted investment in developing an infringing idea.

 Trademarks

A trademark is a distinctive sign which identifies certain goods or services as those produced or provided by a specific person or enterprise. Typically, trademarks include words, symbols, logos, slogans or product packaging and design that identify the source of goods or services. Trademarks serve to build brand awareness and business goodwill. They can impart consumer confidence in a product by association with a brand the consumer trusts.

In addition to obtaining trademark rights, just as with patents, start-ups should be aware of whether their desired name, logo or domain name is already in use by others. Start-ups should protect their brand early by registering key trademarks. Registration is relatively quick and inexpensive. Finally, as the start-up grows, it will become increasingly important to police infringing uses of its marks. Such efforts will help ensure that the business is not losing customers due to confusion with copycats.

 Copyrights

A form of intellectual property that protects the expression of ideas is known as copyrights. For example, computer software code is protected by copyright. While copyrights protect the expression of ideas, they do not protect ideas or concepts themselves. For example, a copyright can protect a particular code of software, but others may still create their own code for the same type of software.

 Conclusion

Intellectual property issues may get brushed aside during the early stages of a business; but it has to be remembered that the benefits of a diligent and intelligent IP strategy are likely to produce serious value. Start-ups should take concert steps in becoming aware of the types of intellectual property that can impact their business. Further, strategically consider pursuing patent, trademark and copyright protection as appropriate. Furthermore, Start-ups should defensively assess the intellectual property landscape of the market of interest, and simultaneously the awareness should be coupled with efforts to ensure that the start-up does not infringe upon the intellectual property of others.