Delhi High Court
Case BriefsHigh Courts

The mistake of the patent agent would be similar to the mistake of an advocate who may be representing parties in any civil or criminal litigation.

Delhi High Court: Prathiba M Singh J. condoned the delay in filing reply to the First Examination Reports (hereinafter ‘FER’) and remarked that applicant did not have an intention to abandon and if the Court is convinced that there was a mistake of the patent agent and the applicant is able to establish full diligence, the Court ought to be liberal in its approach.

The facts of the case are such that the Petitioner, initially engaged European Law Firm, FREYLINGE to file and prosecute the Indian national phase applications of their Patent Cooperation Treaty (hereinafter, ‘PCT’) applications before the Indian patent office. Thereafter, the responsibility of processing, prosecution, maintaining and coordination of these applications were moved by the Petitioner to another European firm namely, GEVERS. Emails were exchanged between the first patent agent and GEAVERS informing the patent agent of the movement of the files from FREYLINGE to GEVERS. The first patent agent had duly confirmed the receipt of instructions to the effect that the file has been transferred. The FER was issued by the Patent Office. However, due to non-filing of the Reply to the FER within the stipulated time, both the applications were ‘deemed to have been abandoned’. Various emails were addressed to the patent office seeking a hearing, however, since no reply was received, the present Writ Petitions were filed seeking setting aside of the order of abandonment.

The Court observed that on perusal of Section 21 of the Patents Act, 1970 (hereinafter referred to as the Act) and Rule 24-B of the Patents Rules, 2003 (hereinafter referred to as the Rules) shows that the application must be mandatorily deemed to have been abandoned unless the applicant has fulfilled all the requirements imposed on him under the Act.

The Court observed that on a conjoint reading of Section 21 of the Patents Act, 1970 along with Rules 24-B, 137 and 138 of the Patents Rules, 2003, leaves no doubt in the mind of the court that insofar as the powers of the Controller are concerned, they are circumscribed by the said provisions and the Controller does not have the discretion to extend the timelines prescribed in the provisions, especially those timelines, that are specifically excluded in Rule 138 of the Patents Rules, 2003.

It is clear that in the prosecution of patent applications, deadlines fixed in the Act read with the Rules fall into two categories:

i. Deadlines which can be extended.

ii. Deadlines which cannot be extended.

The Court opined that patent agents are expected to know which deadlines are extendable and which are not extendable. Non-extendable deadlines include inter alia

1. deadlines relating to entry of the application into the national phase,

2. timelines for filing of request for examination,

3. timelines for putting an application in order for grant etc.,

The Court relied on Ferid Allani v. Union of India 2008 SCC OnLine Del 1756, Telefonaktiebolaget Ericsson v. Controller of Patents, in W.P (C) 9126 of 2009, decided on 11-03-2010 and PNB Vesper Life Sciences v. Controller General of Patents, in W.P 22253 of 2021, decided on 14-03-2022 and observed that while the Controller may have no power to extend the deadline within which the application has to be put in order for grant, courts exercising writ jurisdiction, may in rare cases permit the same, after examining the factual matrix to see as to whether the Applicant in fact intended to abandon the patent or not. Any extraordinary circumstances could also be considered by the Court, such as negligence by the patent agent, docketing error and whether the Applicant has been diligent. However, lack of follow-up by the Applicant would be a circumstance which may lead to an inference that the applicant intended to abandon the patent. Thus, the court would have to examine the circumstances in the peculiar facts of each case.

The Court noted that on a perusal of the chronology of the facts and events, leaves no doubt in the mind of the Court that the Applicant was not negligent and was in fact taking all steps within its command to follow up on the prosecution of the patent application. However, for reasons beyond its own control, the consequence of abandonment has now been saddled upon the Applicant.

In the facts of the present case, the Applicant had undertaken the following actions

• Initially, filed the application in several foreign countries;

• Entered India within the prescribed period;

• Obtained the grant of patent for corresponding applications in several foreign countries;

• Filed the request for examination within the prescribed period;

• Followed up continuously with the patent agent even during the prescribed period as to the status of the applications.

The Court noted that the consequences of patent being abandoned are quite extreme such as depriving the applicant of exclusivity for the invention completely. Thus, such a consequence ought not to visit the applicant for no fault of the Applicant. There was no intention to abandon on behalf of the Petitioner; instead, the Petitioner’s actions indicate that they were actively pursuing the application. Moreover, the judicial opinion in respect of responses to FER or other deadlines seems to suggest that if the Applicant did not have an intention to abandon and if the Court is convinced that there was a mistake of the patent agent and the Applicant is able to establish full diligence, the court ought to be liberal in its approach.

The Court however cautioned that the intention of the Legislature in Rule 138 of the Rules cannot be ignored by the Controller, nor can one ignore the express language of Section 21(1) of the Act, which mandates a deemed abandonment in case of non-compliance with the requirements imposed under the Act. It is only in extraordinary cases, while exercising writ jurisdiction, that the Court may consider being flexible, and this would depend on the facts of each case as to whether a condonation ought to be given at all.

Observations of Parliamentary Committee on “deemed abandonment” provisions

The 161st report submitted by the Department Related Parliamentary Standing Committee on Commerce on 23-07-2021, titled ‘Review of the Intellectual Property Rights Regime in India’ has taken note of the enormous prejudice being caused to patent applicants due to ‘deemed abandonment’ provisions.

The Committee opines that the abandoning of patents, without allowing hearing or petition, may demoralize and discourage patentees in the country to file patents. It recommends the Department that certain flexibility should be incorporated in the Act to make allowance for minor errors and lapses to prevent outright rejection of patents being filed. Hence, a revised petition with penalty or fee may be permitted under the Act for minor or bona fide mistakes that had been committed in the filed patents.”

The Court thus held “the present two applications would fall in the category of exceptional circumstances, owing to the peculiar facts where the response to the FERs deserve to be taken on record.”

[European Union v. Union of India, WP (C) IPD 5 of 2022, decided on 31-05-2022]

Advocates who appeared in this case :

Mr. Peeyoosh Kalra, Mr. Vineet Rohilla, Mr. Rohit Rangi, Mr. Sudhindra Tripathi, Mr. Rohan Kapoor, Mr. Garvil Singh, Mr. Debashish Banerjee, Mr. Ankush Verma, Advocate, for the European Union;

Mr. Harish V. Shankar, Ms. S. Bushra Kazim, Mr. Srish Kumar Mishra, Mr. Sagar Mehlawat, Advocate, for the Union of India.

*Arunima Bose, Editorial Assistant has reported this brief.

Legislation UpdatesStatutes/Bills/Ordinances

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 received the President’s assent on 24-09-2020.

Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

Purpose of the Act:

The following are the objectives of the Act:

  • Creation of an ecosystem where the farmers and traders enjoy the freedom of choice relating to the sale and purchase of farmers’ produce which facilitates the remunerative process through competitive alternative trading channels.
  • To promote efficient, transparent and barrier-free inter-State and intra-State trade and commerce of farmers’ produce outside the physical premises of markets or deemed markets notified under various State agricultural produce market legislations.
  • To provide a facilitative framework for electronic trading and for matters connected.

Key Highlights

Freedom to conduct trade and commerce in a trade area [SECTION 3]

Any farmer or trader or electronic trading and transaction platform shall have the freedom to carry on the inter-State or intra-State trade and commerce in farmers’ produce in a trade area.

Trade and commerce of scheduled farmers’ produce [SECTION 4]

Any trader may engage in the inter-State trade or intra-State trade of scheduled farmers’ produce with a farmer or another trader in a trade area.

Trader who transacts with farmers shall make payment for the traded scheduled farmers’ produce on the same day or within the maximum three working days.

Market fee under State APMC Act, etc., in the trade area [SECTION 6]

No market fee or cess or levy under any State APMC Act or any other State Law shall be levied for trade and commerce in scheduled farmers’ produce in a trade area.

Price Information and Market Intelligence System [SECTION 7]

Central Government may develop a Price Information and Market Intelligence System for farmers’ produce and framework to disseminate information relating to the stated.

Dispute Resolution Mechanism for Farmers[SECTION 8]

In the incident of any dispute arising between the farmer and trader with respect to a transaction, parties may seek a mutually acceptable solution through conciliation by filing an application to the Sub-Divisional Magistrate, who will further refer the dispute to a Conciliation Board.

Suspension or cancellation of the right to operate in electronic trading and transaction platform [SECTION 9]

The Agriculture Marketing Adviser, Directorate of Marketing and Inspection, Government of India or an officer of the State Government may on its own motion or on a petition or reference from any Government Agency take cognizance of any breach of the procedures, norms, manner of registration and code of conduct or any breach of the guidelines for fair trade practices by the electronic trading and transaction platform.

Appeal against cancellation of right to operate [SECTION 10]

An appeal can be made under this Section on being aggrieved by an Order under Section 9.

To Read the detailed Act, please follow the link given below:

Ministry of Law and Justice

Case BriefsHigh Courts

Bombay High Court: S.C. Dharamadhikari and M.S. Karnik, JJ., dismissed an appeal filed against the order passed by Central Excise and Service Tax Appellate Tribunal, Mumbai (West Zone Bench) whereby it had allowed the respondent’s appeal against the order of the Commissioner of Central Excise and Service Tax confirming the demand of service tax of Rs 10,21,11,359.

The respondent had provided services for construction and upgradation of facilities at Shiv Chatrapati Sports Complex, Pune. According to the appellant, the services were covered under the category of “commercial or industrial services” defined under Section 65 (20 b) of the Finance Act, 1994 (prior to amendment vide Act 14 of 2010) as the said stadium was used for commercial purposes. A demand for payment of service tax was raised on the respondent but no payment was made. Representations were exchanged, and by order dated 15-9-2011, the demand of service tax was confirmed. As against this, the respondent approached CESTAT and the said order dated 15-9-2011 was set aside. Aggrieved thereby, the appellant filed the present appeal.

It was not even the case of the appellant that the stadium was exclusively used for commercial purpose. The relevant agreement itself permitted the Committee to use 1/3rd of the total area for commercial purpose. The question before the High Court was whether the user of stadium area to the extent of 1/3rd of the total area for a commercial purpose would tantamount to “commercial or industrial construction service”?

Perusing Section 65 (25-b), the Court observed, “The language employed in the definition clause is clear and unambiguous. The plain meaning as can be understood from the definition clause, more particularly, the clarification contained in clauses (i), (ii), (iii) is that the construction ipso facto is not leviable to service tax, but it is only when it is used, or to be used, primarily for “commerce” or “industry” or work intended for “commerce” or “industry” that service tax can be levied. Thus, it is only that construction which is to be used or primarily to be used for commerce that is subject to levy of service tax.”

Finding that in the present case, the dominant user of the stadium was non-commercial, the Court held that no service tax was attracted. Therefore, upholding the impugned order, the court dismissed the present appeals. [CCE v. B.J. Shirke Construction Technology (P) Ltd., 2019 SCC OnLine Bom 477, decided on 15-03-2019]