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.

COVID 19Op EdsOP. ED.

Introduction: The pertinence of rethinking utility patents

The vaccines against COVID-19 possess a limited degree of efficacy against newer strains of SARS-CoV-2. Even so, in some cases, minor changes in composition may be required.[1] Yet, the adaptability to each strain may not receive patent protection that is enjoyed by the vaccine against the COVID-19 strain. This is so particularly in India, where a patent for a new use, is granted only in exceptional circumstances.[2] It is not as simple as waiving patent rights because the skills, experience and expertise cannot just be learnt, it needs to be inculcated through proper training.[3] The better way to proceed is to incentivise pharmaceutical companies to voluntarily licence not only the original vaccine but also any modified versions of a vaccine if need be. The first step towards the latter is to offer patent protection to incremental inventions.

The author builds a case for the relaxation of Section 3(d) of the Patents Act, 1970. In doing so, the article will explore the scope of the Articles 7 and 1 of the Trade-Related Aspects of Intellectual Property Rights Agreement (the Agreement), the socio-economic context in which the Indian IP regime is based and the stakes that it seeks to balance by analysing Indian judicial pronouncements. The judicial approach will be tested against the aims that it tries to further, in order to demonstrate the inefficiency of the current approach.

Mapping the Scope of discretion under the Trips Agreement

Indian courts[4] have sourced the discretion to mould provisions of the Agreement from Articles 1 and 7 of the Agreement itself. Article 27 i.e. patentable subject-matter needs to be read considering Articles 1 and 7 which lay down the nature and scope of obligations of member countries and the objectives of the Agreement, respectively.

The Agreement under Article 1, limits the freedom of the member States only to determine the appropriate method of implementation of its provisions. Additionally, Article 7, in delineating the objectives of the Agreement makes promotion of technological innovation and transfer and dissemination of technology, the guiding factors in the protection and enforcement of IPR. Further, it identifies the users as well as the manufacturers as stakeholders, and provides for a balance of rights and obligations, conducive to social and economic welfare. Therefore, the room to manoeuvre is only within the substantive provision, here i.e. Article 27 of the Agreement in a manner that furthers equilibrium between stakeholders.

Article 27, in outlining in clear terms the subject-matter of patentability, seeks to exhaust the categorisation of inventions that cannot be commercialised and patented. The line is drawn at those inventions that bear the potential to affect public order or morality. All other inventions, whether products and processes, in all fields of technology, as long as they are new, involve an inventive step and are capable of industrial application, demand patent protection. Hence, the discretion which is to be kept within the boundaries of the Agreement is limited to maintaining balance with respect to matters affecting public order and morality.

Understanding the norm on utility patents: Indian judicial pronouncements

In India, the norm is for the new use of a known substance, to not be granted a patent, while the exception is that it be granted a patent if it meets the threshold of enhanced efficacy.[5] Hence, it is pertinent to understand through what it is that guides the application of the aforesaid threshold.

 The Novartis case[6]: The enhanced efficacy test

The Supreme Court defined efficacy as “the ability to produce a desired or intended result”.[7] Hence, it is the purpose and utility of a drug in terms of the result that it is “desired or intended to produce”[8], that would be the deciding factor when it comes to testing the efficacy of a drug. In other words, it is the therapeutic efficacy that is tested. Although the Court based its decision on the “enhanced therapeutic efficacy”[9]test, it did not provide a standard for the same. Even though the ruling on Section 3(d) was directed at prohibiting ‘incremental invention”,[10] the Supreme Court said that the decision should not be “read as a general prohibition”[11] on applying for patents for an incremental invention in the “chemical and pharmaceutical”[12] sector.

F. Hoffman La-Roche Ltd. v. Cipla Ltd.[13]: The “new form of an old substance” test

The test laid down in this case was that of a “new form of an old substance”.[14] The burden to prove that IN’774 was a new form of an old substance i.e. EP’226, was on Cipla. Cipla however, failed to discharge the burden. As a result, Roche’s evidence of difference in efficacy was considered sufficient for it to be granted a patent under Section 3(d). Notably, for Cipla to have met its burden, the Court considered it sufficient for it to prove that EP’226 on further reaction can result in the formation of IN’774.

The question that remained can be viewed twofold: (1) whether there is “a product which may not strictly covered within the patent claim”[15]; and (2) whether the product “substantially contain the patented product but also contain some other variants or some other parts in addition to the patented article or product”.[16] The Court, relying on the multiple cases[17] including Kirin-Amgen v. Hoechst Marion Roussel Ltd.,[18] advocates for the claims to be interpreted purposively, in that, the real purpose for the invention of the vaccine should guide the decision-making. It must be noted that “a fortiori determination of whether a variant can be subsumed within a broad patent claim is bound to be substantively different (and presumably lower) when compared with the obviousness standard in assessing the question of further working on an invention that could revoke it in the future”.[19]

The abovementioned guidelines, carved out from judicial decisions, are within the scope of discretion granted by the Agreement. This to the extent that they comply with the subject-matter patentability requirements under Article 27 of the Agreement in prescribing a method of implementation of the Agreement that balances the stakeholders’ interests. Despite these guidelines that have been laid down in the landmark cases discussed above, the courts have allowed their judgments to be guided solely by the factor of “access to life saving medicines”.[20] They have justified this factor trumping the other considerations on the ground that it promotes social and economic welfare, an aspect that the Agreement permits a member State to accommodate for. In an effort to facilitate such access and accommodation, they have identified evergreening as a cause that needs to be addressed.[21] Evergreening is a practice that pharmaceutical companies employ, by incorporating minor changes either in the composition of the drug or in the instructions for its administration. In order to remedy this cause, they have stood by the legislative remedy i.e. Section 3(d).[22] Resultantly, for incremental inventions, to surpass the roadblock of Section 3(d), they have to demonstrate “enhancement of known efficacy” – a standard that remains undefined. This approach however, reflects a selective understanding of the Agreement and disregards its overall scheme as decoded above. Such disregard has caused India to overstep its discretion under the Agreement thereby adversely affecting the balance it proposes to create.

Bending the norm: Arguing in favour of utility patents

The key stakeholders in this debate over utility patents, as identified by the Agreement as well as the courts,[23]are the end users and the manufacturers. Therefore, it is the effect on these stakeholders that must be examined to arrive at a stand on the granting of utility patents.

In stark contrast to the aim of Parliament in curating Section 3(d), the current threshold fails to see the cause-and-effect relationship between the granting of patents and access to the public to life-saving medicine.[24] The very theories that form the foundation to intellectual property law identify this integral relationship.

The utilitarian theory,[25] in justifying IPR, posits that technological invention and artistic creation benefit the society and humankind. Hence, to further the utilitarian belief of greatest good to the greatest number of people, monetary incentives are offered to creators in the form of rights to profit from their work. The social planning theory[26]concretises the reflection of the utilitarian belief in the intellectual property regime by advocating for a system that fosters the achievement of a just and attractive culture. It also fortifies the view that intellectual property not only leads to social welfare but also serves the society. This is evidenced by the fact that a prerequisite for the granting of a patent is a complete description of the invention including the methods by which it is to be operated.[27] Consequently, the Government after the expiry of the patent term will have at its disposal, the entire information on the manufacture, operation and use of the patented invention for it to be put out in the public domain. This makes the grant of a patent, an incentive for the inventor to offer complete disclosure. Such disclosure is important in its absence; the society will have to invest a considerable amount of time and money in reinventing the invention from scratch.

This is pertinent when considered in context of the COVID-19 vaccine which can be made to undergo minor changes for it to be more effective against differing strains of SARS-CoV-2.[28] It is important for undivided knowledge to alter the vaccine for a new use, to be available to the public, particularly when the world is aware that the pandemic did not halt at one wave. While this might prima facie seem to be furthering evergreening, when analysed in the context of compulsory licensing, it does in fact strike a balance between the rights and obligations of the producers and users. A compulsory licence is the licence to generically manufacture a patented invention after three years of the patent term.[29] The Delhi High Court in F. Hoffmann-LA Roche Ltd.v. Cipla Ltd.,[30] spells out in clear terms the very objective of compulsory licensing which is to ensure the availability of the drug at affordable prices. The Court’s interpretation of the purpose of compulsory licensing was aided by the legislative intent which was to reasonably ensure that the patentee recovers the enormous cost of research and development.[31] Accordingly, the patent-holder should be accorded monopoly which could be taken away post a minimum period of which in India’s case is three years.[32] This is not to say that the minimum period of three years should not be reduced in light of the current pandemic.[33] Instead, such a change should be guided by uniform considerations and must ideally emanate from the legislature in response to the worsening situation. The most important reason to ensure certainty is that it attracts patent applications for life-saving drugs in the absence of which, even a complete shift toward public welfare will lose its very purpose.[34] The urgency of the matter is resonated in the current context with Adar Poonawalla, CEO of Serum Institute of India, the largest manufacturer of COVID-19 vaccines in the world, indicating his intention to commence COVID-19 vaccine production abroad.[35]

Concluding and mapping the road ahead

The projection of estimated cost of developing a COVID-19 vaccine is $250 million per project with a mere 32% success rate through phase 2 trials.[36] In light of the heavy costs and the possibility of the current vaccines being capable of being modified to suit newer strains, courts should allow the interpretation of their discretion to be guided by the Agreement and the legislative intention In doing so, the equipoise between the rights and obligations of the patentee and the end user as postulated in F. Hoffmann-LA Roche Ltd.v. Cipla Ltd.[37]should be considered the best practice. This is because it embodies the legislative intention in using compulsory licensing as the tool to maintain equilibrium. The only unaddressed question is regarding the standard to test the new use against. While the Novartis case[38] endorses the standard of “enhancement of known efficacy”, F. Hoffmann-LA Roche Ltd.v. Cipla Ltd.[39], brings it down to a two-fold question of whether the new product contains a variant, and whether it differs in purpose from the older version. Notably, it clarifies that such threshold of enhancement for granting a patent for an incremental invention must be lower than that of inventive step and non-obviousness, as employed integrating the initial patent. Ergo, the considerations involved in the rejection of the patent by the IPO in Novartis case[40], should ideally have been rooted in efficacy exclusively in comparison with the initial drug rather than all prior knowledge.


* 3rd-year student, BA, LLB (Hons.) Maharashtra National Law University, Mumbai. Author can be reached at shrutidhonde@mnlumumbai.edu.

[1] Michael Greshko, Existing vaccines should work against new coronavirus variants — for now (National Geographic, 15-1-2021)

[2] The Patents Act, 1970, Section 3(d).

[3]Interview with Dr Prabuddha Kundu, Co-founder and Managing Director, Premas Biotech (The Wire, 11-5-2021).

[4]Novartis AG v. Union of India, (2013) 6 SCC 1.

[5] Patents Act, 1970, Section 3(d).

[6]Supra Note 4.

[7]Ibid.

[8]Sanjay Kumar and Arpita Sawhney, ‘The Patent Litigation Environment in India’ (IAM Magazine 22 May 2020) <https://www.iam-media.com/patent-litigation-environment-india>accessed 29 May 2020.

[9] Novartis, supra Note 4.

[10]Ibid.

[11]William Bennett, Indian Pharmaceutical Patent Law and the Effects of Novartis AG v. Union of India, (2014) Wash. U. Global Stud. L. Rev. 535

[12]Novartis, supra Note 4.

[13] 2015 SCC OnLine Del 13619.

[14]Ibid.

[15]Ibid.

[16] Ibid.

[17]Catnic Components Ltd. v. Hill & Smith Ltd., 1982 RPC 183; Merck & Co. Inc. v. Generic (UK) Ltd., 2004 RPC 31; Improver Corpn. v. Remington Consumer Products Ltd., 1990 FSR 181.

[18]2004 UKHL 46: 2005 RPC 9 (HL).

[19]Merck & Co. Inc. v. Generic (UK) Ltd., 2004 RPC 31.

[20]Novartis, supra Note 4.

[21]Ibid.

[22] Linda L. Lee, Trials and TRIPS-ulations: Indian Patent Law and Novartis AG v. Union of India (2008) Berkeley Technology Law Journal 281.

[23]Novartis, supra Note 4.

[24]Shruti Dhonde & Yashaswi Pande, Balancing IPR and the Right to Health: An Abiding and ad rem Puzzle for a Welfare State (NLUJ CIPS Blog, 30-1-2021) <https://nlujcipsblog.wordpress.com/2021/01/30/balancing-ipr-and-the-right-to-health-an-abiding-and-ad-rem-puzzle-for-a-welfare-state/> accessed 11-4-2021.

[25] V.K. Ahuja, Law Relating to Intellectual Property Rights (3rd Edn., LexisNexis 2017).

[26]Ibid.

[27] The Patents Act, 1970, Section 9.

[28] Greshko, supra Note 1.

[29] The Patents Act, 1970, Sections 91-94.

[30] 2009 SCC OnLine Del 1074.

[31] Ibid; Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India, 2016 SCC OnLine Del 1951.


[32]
Telefonaktiebolaget, supra Note 31.

[33] Greshko, supra Note 1.

[34]Dhonde and Pande, supra Note 24.

[35] Serum Institute Chief Says He’s Left India, Planning to Start Covid Vaccine Production Abroad (Scroll.in, 1-3-2021) < https://scroll.in/latest/993820/coronavirus-serum-institute-chief-says-he-is-planning-to-start-vaccine-production-outside-india> accessed 1-5-2021.

[36]Andrew Lo, The Challenging Economics of Vaccine Development in the Age of COVID-19, and What can be Done about it? (DIA Global Forum, May 2020) <https://globalforum.diaglobal.org/issue/may-2020/the-challenging-economics-of-vaccine-development-in-the-age-of-covid19-and-what-can-be-done-about-it/> accessed 11-4-2021.

[37]Supra Note 30.

[38]Supra Note 4.

[39]Supra Note 30.

[40]Supra Note 4.

Supreme Court of The United States
Case BriefsForeign Courts

Supreme Court of The United States: While deciding the patent dispute between Minerva Surgicals and Hologic Inc., the Court made certain significant observations with regards to the application of the doctrine of assignor estoppel. The Court held that the doctrine of assignor estoppel, which is grounded in the centuries-old fairness principles, applies only when the assignor’s claim of invalidity contradicts explicit or implicit representations he made in assigning the patent.

Facts and Contentions: In the late 90s, Csaba Truckai invented a device to treat abnormal uterine bleeding known as the NovaSure System. The system used a moisture-permeable applicator head to destroy targeted cells in the uterine lining. Truckai filed a patent application and later assigned the application, along with any future continuation applications, to his company, Novacept, Inc. The PTO issued a patent for the device. Novacept, along with its portfolio of patents and patent applications, was eventually acquired by Hologic, Inc.

In 2008, Truckai founded Minerva Surgical, Inc., where he developed a purportedly an improved device to treat abnormal uterine bleeding, called the Minerva Endometrial Ablation System. The new device used a moisture-impermeable applicator head to remove cells in the uterine lining. The PTO issued a patent, and the FDA approved the device for commercial sale. Meanwhile, Hologic filed a continuation application with the PTO, seeking to add claims to its patent for the NovaSure System. Hologic drafted one of its claims to encompass applicator heads generally, without regard to whether they are moisture permeable. The PTO issued the altered patent in 2015. Subsequently, Hologic sued Minerva Inc. for patent infringement.

It was Minerva’s contention that Hologic’s patent was invalid because the newly added claim did not match the invention’s written description, which addresses applicator heads that are water permeable. Minerva also argued that estoppel should not apply because it was challenging a claim that was materially broader than the ones Truckai had assigned.  Hologic invoked the doctrine of assignor estoppel and contended that because Truckai had assigned the original patent application, he and Minerva could not impeach the patent’s validity.

The District Court, Court of Appeals and the Federal Circuit agreed with Hologic argument that assignor estoppel barred Minerva’s invalidity defense. Minerva thus appealed before the SCOTUS to either abandon or narrow the application of assigner estoppel.

Observations: The Court, with a ratio of 5:4 upheld the doctrine of assignor estoppel and also clarified the limits of the doctrine. The majority comprising of John Roberts, C.J., and Elena Kagan, Stephen Breyer, Sonia Sotomayor and Brett Kavanaugh, JJ., referred to the SCOTUS case of Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U. S. 342 (1924), wherein the Court approved the “well settled” patent-law doctrine of assignor estoppel. The Courts have applied the doctrine in order to deal with inconsistent representations about a patent’s validity as the doctrine limits an inventor’s ability to assign a patent to another for value and later contend in litigation that the patent is invalid.

The Majority disagreed with Minerva’s contention to abandon the doctrine. They noted that abandonment of the doctrine is not possible as it would foreclose applying in patent cases a whole host of common-law preclusion doctrines (a broad result that would conflict with this Court’s precedents) and subvert the Congressional intent of including assignor’s estoppel in the US law. The Court further observed that the Supreme Court’s precedents have never decided the fate the doctrine but rather suggested that the doctrine “needed to stay attached to its equitable moorings”.

The Majority further noted that, “Assignor estoppel reflects a demand for consistency in dealing with others. When a person sells his patent rights, he makes an (at least) implicit representation to the buyer that the patent at issue is valid. In later raising an invalidity defense, the assignor disavows that implied warranty. By saying one thing and then saying another, the assignor wants to profit doubly”. Such a course of conduct, as per the Majority, is, unfair dealing, and the need to prevent such unfairness outweighs any loss to the public from leaving an invalidity defense to someone other than the assignor.

Assignor Estoppel- Limitations: Shedding light on the limitations of the doctrine of assignor’s estoppel, the Court observed that-

  • It applies only when its underlying principle of fair dealing comes into play. “The principle demands consistency in representations about a patent’s validity. When an assignor warrants that a patent claim is valid, his later denial of validity breaches norms of equitable dealing. But when the assignor has made neither explicit nor implicit representations in conflict with an invalidity defense, then there is no unfairness in its assertion—and so there is no ground for applying assignor estoppel”.
  • When a later legal development renders irrelevant the warranty given at the time of assignment.
  • A post-assignment change in patent claims can remove the rationale for applying assignor estoppel. As per the majority, this situation arises when most often when an inventor assigns a patent application, rather than an issued patent. The assignee may return to the PTO to enlarge the patent’s claims, assuming that the new claims are materially broader than the old ones, the assignor did not warrant to the new claims’ validity.

Amy Coney Barret, J., (along with Neil Gorsuch and Clarence Thomas, JJ.) and Samuel Alito, J., filed their dissenting opinions.

[Minerva Surgical Inc. v. Hologic Inc., No. 20–440, decided on 29-06-2021]


Sucheta Sarkar, Editorial Assistant ahs reported this brief.

Op EdsOP. ED.

The influx of AI in various businesses intricate has forced the companies to rethink the base of a business and change its attitude towards more prospective business strategy including innovation from AI. The bigger issue comes up when AI itself becomes the inventor or author. This write-up will aim to delve around the bigger issue of whether an AI could be ascribed as an inventor in the light of the Dabus case and how this case was a missed chance to develop a jurisprudence of this contentious issue.

The case of Stephen L Thaler v. Comptroller General of Patents, Design and Trade Mark[1]  is the latest celebrated case of  United Kingdom (‘UK’). It starts from two patent applications, GB1816909.4 and GB1818161.0, respectively filed by Thaler in his name, in the United Kingdom Intellectual Property Office (‘IPO’) for the grant of patents. The application specifies that Thaler was not an inventor, which is possible as Section 30[2]  of the Patents Act, 1977 (‘the Act’) states that the right to apply for a patent is transferable. IPO subsequently notified Thaler to file the statement of inventor-ship and the right to grant patents pursuant to Section 13 of the Act which was Patent Form 7[3]. Thaler filed  Patent Form 7 where he stated that the inventor is none other than an AI named Device for the Autonomous Bootstrapping of Unified Sentience (‘DABUS’) and since he is the owner of the AI is entitled to obtain the right to grant of the patents. To put it simply, Dabus is the inventor, and Dabus is owned by Thaler. Due to this ownership of Dabus by Thaler, Dabus has transferred the right to grant patents to Thaler. So inherently, the contention assumes that  Dabus is entitled to have patents and hence, it can transfer it to its owner, Thaler. This inherent assumption put in the case has caused the conundrum that whether an AI can be granted a patent, leave alone transferring it. The decision of IPO was negative, which was appealed to the High Court of England and Wales, Special Patents Court which upheld the IPO’s decision.

A similar matter was also been raised in the European Patent Office as well as the United States Patent and Trademark Office but it received the same fate. For our discussion, the author will be restricted to the decision of the Special Patents Court of the High Court of England and Wales and will analyse the situation in the light of the reasoning given by the High Court.

The author tried to delve into various legislations and ended up getting only one provision that does not directly specify but tries to fill some gap with regards to computer-generated work specifically dealing with copyright. Section 9 Para 3[4]  of the UK Copyright, Design and Patents Act, 1988 specifies that any artistic, literally, dramatic or musical work that being computer-generated; the author will be the one who undertakes all the necessary arrangements. But it doesn’t answer our tryst for patents and inventions. The United States (‘US’) doesn’t leave any scope. Section 306[5]  of the Compendium of the US Copyright Office states clearly that registration of authorship will only be done, provided that the work was created by a human being, giving no scope to AI made expressions leave alone for copyrights. The US Patents Law narrows down the term inventor to ‘individual’ or in case of the joint invention, ‘individuals’. Hence, by using the term ‘individual’, the US does not leave any scope for corporations too.

Before getting on to analyse this case let us make ourselves very clear with two sections of the UK Patents Act, 1977 around which the whole case revolves. Section 7[6]  of the Act provides the right to apply for and grant patents whereby any person may make an application for patents and the inventor can be granted the patents. Section 7(2) states that any person associated with the application through any conventions or any rule of law or any successor is entitled to be granted the patents. Section 7(3) states that the ‘inventor’ concerning the invention is the actual devisor of the invention. Whereas, Section 13[7]  talks about the right of an inventor to be mentioned in the invention. The court analysed each of the sections before arriving at a judgment.

A. Was the Court’s decision appropriate?

The IPO as well the Special Patents Court relied on similar reasoning to reach an agreement. Dabus is not a legal person and being a machine it cannot hold patents for the Act. To critically analyse the court’s decision, we split this into two parts. First, did the court explain the nature of ‘inventor’? Yes, the court did try to answer who the inventor is. But the answer seems to be very simplistic. The Court continuously relied upon the fact that Dabus cannot be granted the patent because it is not the ‘person’ without getting into the literal interpretation of what ‘person’ can constitute. Defining the limit of ‘person’ is something that seems to be left unaddressed.  A person is natural as well as a legal person. Corporations forms as a part of a legal person.  Through the judgment the Court made itself very clear that the inventor cannot be any other than a person, therefore avoiding getting outside the bandwidth of the statutory scheme of the Act. One reason why it can be said to be a missed chance is because of their prior assumption of a person being a human and therefore, avoiding stretching the constitution of the term inventor.

Secondly, did the court try explaining the subject-matter? The author feels that the court failed to address such a contentious issue holistically. What the court did is to revolve around the term ‘inventor’ linking it to ‘person’ keeping prior presumption of a person being a human. Trying to solve this conundrum has left the larger picture being unaddressed about the fate of future cases with this subject-matter. The court very clearly stated that it can only construe legislation and cannot legislate agreeing to the point that this is a policy issue that requires deliberations. It is a matter of how should be and not how the law is. But the court has the power to interpret the law. Only humans can be persons are something which can be treated as a narrow definition being taken by the court.  If a legal person can be construed as a corporation, how minimal a chance can be that an AI could also be a person? The second reason why it can be said to be a missed chance is because of this narrowed interpretation and a missed chance to dictate the jurisprudence that could govern the AI-related inventions in the world.

B. Was the reasoning of the court in consonance with that of the existing legislation?

Sections 7 and 13 of the Act play a major role in this case. Thaler contended that his arguments are based upon Section 13 of the Act and not on Section 7, whereas, the court decided to read Section 13 with Section 7. Section 7 talks about the right to apply for a patent where under Clause 1 the term used is the person. On the other hand, the term used in Clause 2 is ‘inventor’. Clause 3 specifies that the inventor is the actual devisor of patents. Now, Section 13 talks about mentioning the inventor. Primarily, there has been no explicit ‘prohibition’ for granting a patent to AI. Sticking to Section 13 will make the job easier as it speaks of mentioning the inventor which Thaler did by mentioning Dabus. But, the court reiterated the reasoning observed in  Yeda research and development Company Ltd. v. Rhone-Poulenc Rorer International Holding[8]  that Section 7 contains an exhaustive code to determine who is entitled to grant the patents. The author feels that the reasoning being relied upon is wrongly represented. If an inventor used Section 13 as a part of the arguments advanced, there seems no reason to exclude the invention of an AI. Section 13 simply talks about the mentioning of the inventor which Thaler did by mentioning Dabus. The author is of the view that reading Section 13 with Section 7 is being purely misconceived and was unnecessary in the present case. Thaler’s contention being only subject to Section 13 was enough to prove that an AI can be mentioned as an inventor. Section 7(3) specifies that the inventor is one who is the actual devisor of the invention. Let’s suppose, if we read Section 13 with Section 7(3), even then also Dabus is being qualified for being the inventor. The main problem lies with the word ‘person’ being used in Section 7(1), hence either increase the threshold of who the ‘persons’ can be, or it’s better to not read Section 7 as Section 13 is sufficient to prove.

The author feels that, if for the subject-matter, Section 13 sufficiently answers, then it is highly imperative not to link with other sections for the sake of bringing more clarity.

C. Was the Court successful in providing for any policy implications?

The rejection of granting of the patent to Dabus can have large policy implications for the whole world. Not granting the patents sparks a new debate as to who will be the owner of the AI inventions. Well as the author already pointed out, this case was a missed chance to formulate a policy that could at least bring some clarity for the inventions. The author respects the court’s decision and the limitation being propounded by having a separation of power. But the author feels that the court could, at least, have framed some guidelines which can specify the future of such cases. To dismiss the case giving a simple reason, that it being a larger policy issue, cannot be a sufficient answer. One cannot deny the fact that these cases will not come up. The author will reiterate two reasons that will substantiate the lack of policy implication and therefore, it is a missed chance. Firstly, one is not able to effectively interpret what can ‘person’ constitutes. And secondly, not able to effectively deal with the primary subject-matter that who will be the owner of AI-related inventions? Instead, the court relied upon that AI cannot be granted patent since they are not a person and left the question of who should be the owner of AI inventions to a larger policy issue.

Dabus’ case will prove to be the future of AI inventions. In this era of technological interventions, it is very hard to assume the extent of human interventions. Those businesses which are based upon AI for their conduct must be asked to subtract the AI inputs so that the proportions of human inputs could be ascertained, and then it will be realised the depth of AI intervention in today’s technological era. Mostly it has been contended that AI is the tool used by humans in inventing. With the Dabus case, the tool is inventing, Even if the case has been dismissed, it will be a start of the battle for an effective mechanism for AI-related Inventions.


*Author is an Advocate practicing in Allahabad High Court and can be reached at saranshchaturvedi09@gmail.com

[1] [2020] EWHC 2412 (Pat)

[2] Section 30. Nature of, and transactions in, patents and applications for patents

[3] Patent Form 7

[4] Section 9 Para 3, UK Copyright, Design and Patents Act, 1988

[5] Section 306, Compendium of the US Copyright Office

Click to access ch300-copyrightable-authorship.pdf

[6] Section 7. Right to apply for and obtain a patent

[7] Section 13. Mention of Inventor

[8] [2007] UKHL 43 at para 18

Case BriefsHigh Courts

Delhi High Court: C. Hari Shankar, J., after a wholesome discussion, rejected the idea of the constitution of a “two-tier” Confidentiality Club proposed by InterDigital Technology Corporation, and instead suggested the terms for constitution of a single-tier Confidentiality Club.

Factual Background

Xiaomi Corporation has been sued by Interdigital Technology Corporation alleging infringement of Indian Patents Nos 262910, 295912, 298719, 313036 and 320182.

Standard Essential Patents (SEPs)

Xiaomi has been using the technology contained in Standard Essential Patents (SEPs) without obtaining the license from Interdigital.

Hence in view of the above, Interdigital has sought a permanent injunction against Xiaomi from manufacturing, selling, assembling, distributing, advertising, exporting, importing or using, in their devices, technology which infringes the SEPs.

In the alternative, a direction has also been sought to XIAOMI, to take a license from Interdigital, for usage of its SEPs, on fair reasonable and non-discriminatory (FRAND) terms to be fixed by this Court.

InterDigital filed IA’s under Oder XXXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908 and Chapter VII Rule 17 of the Delhi High Court (Original Side) Rule, 2018.

Chapter VII Rule 17 of the Original Side Rules reads thus:

“17. Confidentiality Club. – When parties to a commercial suit wish to rely on documents/information that are commercially or otherwise confidential in nature, the Court may constitute a Confidentiality Club so as to allow limited access to such documents/information. In doing so, the Court may set up a structure/protocol, for the establishment and functioning of such Club, as it may deem appropriate. An illustrative structure/protocol of the Confidentiality Club is provided in Annexure F. The Court may appropriately mould the structure/protocol of the Club, based upon the facts and circumstances of each case.”

Confidentiality Club Regime is standard protocol, especially while dealing with litigations involving allegation of patent infringement.

Bench in the instant case is concerned whether the Confidentiality Club could be set up in the manner sought by InterDigital.

What kind of Confidentiality Club does Interdigital seeks to be set up?

It seeks setting up of a “two-tier” Confidentiality Club, comprising an “outer tier” and an “inner tier”. The documents which would be open to the members of the “outer tier”, are denoted, in the application of InterDigital, as “Confidential Information”, whereas the documents, to which members of the “inner tier” alone would have access, had been denoted as “Legal Eyes Only (LEO) Confidential Information”.

Parties, as well as their officials and employees, would have no access to the “inner tier” documents.

Mr Parvin Anand has stated that the exclusion of representatives of the parties, from having access to the inner tier documents is non-negotiable.

Bench posed two queries to Mr Parvin Anand, which were as follows:

  • How an advocate could be expected to be appropriately instructed, if he is unable to share, with his clients, the material on which the OP seeks to rely?
  • How the Court could come between the advocate and his client, insofar as the “inner tier” documents were concerned, and injunct the advocate from disclosing the documents to his client?

Wouldn’t the above-stated amount to an unwelcome and unjustified, incursion by the Court into the sacred space that exists between the client and counsel?

Mr Anand submitted that no occasion would arise for the Court to come in between the client and counsel as, if this Court were to accede to the prayer, of InterDigital, for setting up of the “two-tier” Confidentiality Club, it would be for Xiaomi to instruct its Counsel not to disclose, to it, the “inner tier” documents.

Court was befuddled with the above response and expressed that it does not understand how the Court could insist on Xiaomi contracting with its counsel to keep documents shown to its counsel and on which InterDigital relies against Xiaomi, undisclosed to Xiaomi itself.

Hence, the Court held that it cannot by judicial fiat, impose any such contractual dispensation between Xiaomi and its Counsel.

Bench’s opinion on setting up of ‘Confidentiality Club’

Bench in very clear words opined that the mere fact that Courts, overseas, may have acquiesced to the setting up of such Confidentiality Clubs cannot be of any substantial significance, in deciding the present application of InterDigital.

Bench relied on the decision of this Court in M. Sivasamy v. Vestergaard Frandsen A/S, 2009 (113) DRJ 820 (DB), wherein the following was the Court’s observation:

“…with respect to the litigation in India, the Courts in this country would be guided by the provisions of the Laws as applicable in this country and the pleadings in the suit in this court and not by any orders or decisions of the foreign court, unless, the decision of the foreign Court becomes final and so that it can operate as res judicata between the parties and operate in the parameters of Section 13 and Section 44-A of the Code of Civil Procedure, 1908.

No useful purpose will be served in making reference to various orders of the Courts in the different countries as one does not know what are the ingredients/requirements of causes of action of the different laws of those countries and what were the pleadings of the cases in the foreign courts.”

Bench needs to decide on whether “comparable patent licence agreement” could be justifiably included in an ‘inner tier’ of confidential documents, to be kept away from the eyes of the defendant, as well as all its officers and employees?

Court denied the prayer for keeping certain documents, and information, inaccessible to Xiaomi and its personnel, and allow access, thereto, only to the advocates and experts nominated by Xiaomi.

Whether “two tier” Confidentiality Club legally palatable in the mind of the Court or not?

In case the Court finds the request, of InterDigital, for setting up of a “two-tier” Confidentiality Club, to be acceptable, the benefit thereof would, naturally, ensure to Xiaomi as well. The question, therefore, is not whether Xiaomi would also get the benefit of such an arrangement, but of whether such an arrangement is, to the mind of the Court, legally palatable or not.

No civil suit, be it for enforcement of rights relating to intellectual property, or any other right, can claim innocence to the rigour and discipline of the CPC and the Specific Relief Act, 1963.

Further, the Court observed:

Whether either of the parties, to litigation, needs, or does not need, to see a particular document, would be a decision which essentially rests with the party itself.

Can InterDigital, simply put, assert that Xiaomi does not need to see a document on which InterDigital places reliance, to contest the case initiated by it against Xiaomi?

For the above-stated Court’s opinion was in negative and bench relied on the observations in the decision of Transformative Learning Solutions v. Pawajot Kaur Baweja, 2019 SCC OnLine Del 9229, in paras 23 and 24.

Adding to its observations Court also stated that:

Patent infringement, in the case of SEPs, has, however, a unique feature. A holder of a SEP is not entitled, of right, to seek an injunction against infringement of its SEP, merely on making out a case of such infringement. This, essentially, means that every holder of a SEP is required, in law, to agree to the licensing of its SEP to willing licensees.

Court noted that the plaintiff desires to include the license agreements in the ‘inner tier’ to be kept away from the eyes of the defendants as well as all their officers and employees.

Bench found the above suggestion to be completely antithetical to, and destructive of, the most fundamental notions of natural justice and fair play.

Court again stressed upon the fact that while penning this judgment, it is only addressing the prayer of InterDigital, for the constitution of a two-tier Confidentiality Club, consisting of “inner tier” and “outer tier” documents.

In line of the above position, Court remarked:

Permitting the constitution of such a Club would amount to granting blanket permission, to InterDigital, to keep certain documents away from Xiaomi, its officers and its employees.

Adding to the above, Court also stated that in case the parties are able to agree and arrive at a level playing field, then this judgment shall not come in the way of their doing so.

As the Bench is only concerned with the issue of whether such an arrangement as being discussed can, against its wishes be imposed on Xiaomi.

Court further dealt with the Annexure-F to the Original Side Rules which is cited as “an illustrative structure/protocol of the Confidentiality Club” which may be “appropriately moulded” by the Court.

Membership of the Confidentiality Club, constituted in the manner envisaged by Annexure F is, clearly, limited to three advocates and not more than two external experts. Mr Anand submitted, relying on this Annexure, that the parties, and their officials and representatives, may legitimately be excluded from the Confidentiality Club constituted by the Court.

Bench asserted that, if InterDigital can come to terms with Xiaomi, and they agree, ad idem, to the constitution of such a Confidentiality Club, in which “inner tier” documents would remain away from the prying eyes of InterDigital and Xiaomi, as well as their officers and employees, this order shall not stand in their way. As of today, however, Xiaomi is not agreeable to such an arrangement.

Client-Lawyer Relationship 

Further, stating that the client-lawyer relationship in Indian Law, has its own distinct incidents, Bench relied on the Supreme Court decision in Himalayan Coop. Group Housing Society v. Balwan Singh, (2015) 7 SCC 373.

Supreme Court in its’ decision of An Advocate v. B.B. Haradara, 1989 (1) ARC 72 (SC) and Om Prakash v. Suresh Kumar, 2020 SCC OnLine SC 100, iterated that the duty of advocates to act, at all times, under instructions from their clients.

SEP infringement litigation cannot be treated as a category sui generis, to which the principles enunciated in these decisions, as well as the Bar Council of India Rules, would not apply.

Court cannot trust such arrangements discussed above upon Xiaomi, without its consent, in the absence of any clear right having been established by InterDigital, for the imposition, on Xiaomi, of such an arrangement.

During the course of the hearing, the thought came to the Court several times that – What if XIAOMI is unwilling — as it is, in the present case – for the 3rd party license agreements, on which InterDigital relies, to be shown only to its advocates and experts, and not its own officials of personnel?

What if Xiaomi says that it is not willing to contract, with its counsel, to keep undisclosed, from Xiaomi, the documents which have been shown to him?

To the above, Mr Pravin Anand submitted that, having involved Xiaomi in a litigative exercise, by filing the present suit against it, InterDigital can insist on Xiaomi prosecuting the suit, and defending itself against InterDigital, without being shown the documents on which InterDigital proposes to rely.

Bench on hearing the above submission summarily rejected it.

Further, in Court’s view, there can be no question of this Court lending its approval to any arrangement in which the third-party license agreements, constituting the very basis of the case set up by InterDigital against Xiaomi, remain undisclosed to Xiaomi, as well as its officials and personnel and are shown only to advocates (who are not in-house counsel) and experts. Any such arrangement would violate the provisions of the Bar Council Rules as well as the law laid down in various decisions including, inter alia, Himalayan Coop. Group Housing Society v. Balwan Singh, (2015) 7 SCC 373.

No setting up of a “two-tier” Confidentiality Club

While concluding its decision, Court held that there is substance in Mr Pravin Anand’s submission that InterDigital cannot, very well, disclose details, in third-party license agreements which, as agreed between InterDigital and such third parties, are required to remain confidential. At the same time, InterDigital cannot, rely on such material against Xiaomi, holding the material back from the representatives of Xiaomi on the plea of confidentiality. InterDigital is, therefore, at liberty to redact, from the documents being treated as confidential, any such detail which, according to it, cannot be disclosed to any third party, including the representatives of Xiaomi.

Though if, Xiaomi agrees to the constitution of such a Club, then this Order would not stand in its way.

Bench held that instead of a “two-tier” Confidentiality club, a single-tier Confidentiality Club can be constituted in the following terms:

(i) Each party shall nominate four advocates, six representatives and two experts, who would constitute the confidentiality club.

(ii) The members of the confidentiality club alone shall be entitled to inspect the confidential information. In the case of the advocates and experts, such inspection would be to the extent such inspection is required in order to perform their professional duties in relation to the present proceedings on behalf of the party by whom they are engaged.

 (iii) The documents, regarded as “confidential information” would be filed in sealed cover, to be retained with the Registrar General of this Court under seal and in safe custody.

(iv) The members of the confidentiality club shall be entitled to inspect the confidential information before the Registrar General and, after the inspection is over, the documents and information shall be resealed and returned to the Registrar General.

 (v) The members of the confidentiality club shall be bound by confidentiality orders passed by this Court and will not be allowed to make copies, disclose or publish the contents of the confidential information or documents anywhere else or to any individuals who are not privy to the confidential information, including in other legal proceedings or oral and written communications to the press, etc.

(vi) During the recording of evidence and other proceedings of this Court with respect to the confidential information, or when the confidential information is being looked at, only members of the confidentiality club shall be allowed to remain present. Such proceedings will be conducted in camera.

  (vii) Any evidence, by way of affidavit or witness statement, containing confidential information shall also be kept in a sealed cover reflecting the confidential and designation, with the learned Registrar General, and would be accessible only to the members of the confidentiality club.

(viii) Neither party would be permitted to rely on any material which is not disclosed to the nominated representatives (as opposed to advocates and experts) of the opposite party. Should either party feel that any details, contained in any document, cannot be shown to the nominated representatives of the opposite party, it is at liberty to redact such details or particulars from the document(s) in question. Needless to say, the party that redacts any particular is, in any document or evidence, shall not be permitted to rely on such a redacted particulars. It shall, however, be open to the opposite party to plead that disclosure of such redacted material is necessary for its defence. In such a case, the court would decide, on a document-to-document basis, whether redacting of the “confidential” details, in the document, should, or should not, be allowed. This, in Court’s opinion, is the maximum extent to which the plea, of InterDigital, for keeping away, from the representatives of Xiaomi, “confidential” details and documents, can be accommodated.

(ix) The confidential documents/information shall not be available for inspection after disposal of the matter, except to the parties producing the same.

Hence, the application stands disposed of in the above terms. [Interdigital Technology Corpn. v. Xiaomi Corpn., 2020 SCC OnLine Del 1633, decided on 16-12-2020]


Advocates for the parties:

For the plaintiffs: Pravin Anand, Vaishali Mittal, Siddhant Chamola and . Pallavi Bhatnagar, Advocates.

For the Defendants: Saikrishna Rajagopal, Siddharth Chopra, Sneha Jain, Garima Sahney, Anu Paarcha, Dr Victor Vaibhav Tandon, Arjun Gadhoke and Charu Grover, Advocates.

Op EdsOP. ED.

Patents and trade secrets are the only two forms of protection available in the intellectual property regime that protect information. But the same innovation cannot enjoy protection under both forms of rights. Once a particular invention is patented, then the patentee cannot seek to protect the same invention and the information disclosed in the patent as a trade secret or confidential information by using a know-how agreement. While this is an established jurisprudence, what happens when information related to the patented innovation which is not disclosed in the patent is brought under claim for protection as trade secret? The Delhi High Court has answered this question while discussing the interplay between patents and trade secrets in the Indian jurisdiction its latest Judgment in Prof. Dr. Claudio de Simone  v. Acital Farmaceuatica Srl [1].

In this case, the plaintiff was the owner of a patented formula for a drug under the US Law. He entered into a patent licence agreement with one of the defendant companies to manufacture and import the drug into India. He separately entered into a know-how agreement with the defendant for the information on the strain selection and the blending ration of the bacteria which was maintained as a trade secret and was not disclosed in the patent. With regards to India, the plaintiff did not have a corresponding Indian patent for the drug formula and just entered into a know-how agreement with the defendant. Once the US patent expired, the know-how agreements were also terminated by the plaintiff due to the cheaper ingredients used by the defendants without his approval. Thereafter, the defendant group manufactured their own product similar to that of the plaintiff claiming it to be the same as the plaintiff’s formula. The plaintiff moved to the court for an injunction of the same. The Delhi High Court had to now analyse “whether an invention which does not qualify as patented product and has no property right therein, can acquire property rights by the third person entering into an agreement of exchange of Know-How and thus claiming confidentiality”. The plaintiff aimed to protect the information about the strain selection and blending ration which was not mentioned in the patent as a trade secret in India.

The Delhi High Court held that the information about the strain and blending ration cannot be protected as a trade secret. The ration was that once the patent over the invention has expired, all the information related to the innovation has gone into the public domain and hence no information related to the innovation can be protected as a trade secret.

Though both patents and trade secrets are IP rights that protect information, it has been long established that the decision to choose between patents and trade secrets does not necessarily have to be an “either-or” situation for the inventor. Under the layered approach for protection of innovations, both the patents and the trade secrets can be used to protect different aspects of the same invention. It has been understood widely that even after a patent application is published, patent protection and trade secrets are mutually exclusive. Both forms of protection can be pursued and should be considered for protecting valuable innovation. Hence, a more important inquiry is to decide which aspects of an invention to patent and which aspects to protect as trade secrets as both offer different types and levels of protections, and a company can use both to maximise the benefits afforded by these protections. This approach has been approved in many foreign jurisdictions as in Wyeth v. Natural Biologics Inc[2], wherein, a pharmaceutical company protected the method of manufacturing the product as a trade secret even after the patent had expired. The California Court in Altavion, Inc. v. Konica Minolta[3] has also held that if a patentable idea is kept secret, the idea itself can constitute information protectable by trade secret law.

In contrast, in the present case, the Delhi High Court cited Navigators Logistics v. Kashif Qureshi[4] to hold that trade secrets and confidential information are not equated to property in India. The Court rejected the possibility that a patent can be different from know-how and trade secrets by explaining Section 10 of the Patents Act[5] which requires the invention to be “describe(d) sufficiently to indicate in the title the subject-matter to which the invention relates and to fully and particularly describe the invention and its operation or use and the method by which it is to be performed, the best method of performing the invention which is known to the applicant…”. The Court used the provisions of the Patents Act to state that all the information related to the functioning and the operation of the innovation are presumed to have been disclosed in the patent and hence once the patent expires, the entire information transfers to the public domain and no trade secret and know-how can be claimed on any information relating to the patent thereafter. The Court has in effect rejected the usage of the layered approach of innovation protection which has been firmly upheld in the foreign jurisdictions. The Court only holds good an ideal scenario in which the method of working described in the patent is the only method of operation of the innovation and there is no separate know-how for the successful implementation of the innovation. With due respect, in our opinion the independent understanding of patents and know-how has been blurred by the Court. The “best mode” of operation which is required to be disclosed under the patent may not be the most convenient commercially viable method of operation of the innovation and this possibility has been overlooked by the court. The Indian IP protection regime can seek light from the foreign jurisprudence, wherein the layered approach has been upheld and fetch clarity amidst this conundrum.

The intersection of patents and trade secrets can be described as a fine balance between disclosure and secrecy. The Indian IP domain still has enough room for discussion with respect to the aspect of protection of information under both patents and as trade secrets especially after the rejection of the layered approach of innovation protection by the Delhi Court. Furthermore, the position of India with respect to trade secrets is not clear as there is no proper law implemented with regards the same and hence, the law should be made for better understanding which further should also be able to provide more clarity to the IP regime that protects information.


*Final year and penultimate year students (resp.) from NALSAR University of Law, Hyderabad

[1]  2020 SCC OnLine Del 476

[2]395 F.3d 897 (8th Cir. 2005).

[3] 226 Cal. App. 4th 26, 171 Cal. Rptr. 3d 714 (2014).

[4]2018 SCC OnLine Del 11321

[5] The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India).

Op EdsOP. ED.

This year’s World Intellectual Property (IP) Day campaign—Reach for Gold—takes a closer look to the universal values sports encompass—excellence, respect and fair play—power their global appeal. It explores how innovation, creativity and the IP rights that encourage and protect them support the development of sport and its enjoyment around the world.[1]

There is virtually no sport that has remained unchanged since its inception; all have seen innovation and growth. What has driven this progress? To a large extent, IP rights have provided the right incentives to continuously inspire advancement in sports. Different kinds of IP rights stimulate the growth of the sports industry in different ways. This article examines how five important categories of IP rights (patents, trade marks, design rights, copyrights, and trade secrets) are used in the sports sector to protect assets, generate value, and stimulate growth.

Patents

Patent system has proved to be a powerful incentive to innovate with a no less important societal benefit of enhancing the common pool of knowledge and stimulating others to build on and improve the current state of the art—setting a virtuous cycle in motion. Sports is a sector that directly uses and benefits from the patent system. Sporting equipment is continuously evolving. New technologies help athletes jump higher, swim faster, cycle longer, and hit a ball harder and farther. Safety also improves with technologies that lessen impact and stress on athletes’ bodies. There are literally tens of thousands of utility patents relating to sports. A search of the Google patents public datasets reveals hundreds of thousands of utility patents related to sports and making reference to such terms as “athletic” or “athletes”.[2]

Trade Marks

Branding plays an essential role in creating value, interest, and vitality in sports. It drives consumer loyalty and confidence in the quality and features of sporting goods. It also generates allegiance to sports teams and sportswear styles. The sports sector presents a unique opportunity to create a “domino effect” in trade mark value creation.[3] Consider an individual athlete who becomes a dominant player in a team sport and develops his or her own individual brand. The dominance of this athlete drives the growth and popularity of the athlete’s team as well as the entire professional league in which he or she plays. There are numerous examples of athletes who raise teams and entire sports leagues to national and even global prominence and strengthen the brand and goodwill associated with both.

Designs

An equally important IP right in the sports sector is aesthetics protected by design-specific IP rights. Industrial designs are key to making a product attractive and desirable. Companies spend vast amounts of resources on understanding consumers’ tastes and developing stylish and attractive product designs to capture valuable market segments. These designs often become their most valuable assets .

Copyrights

Copyright plays a critical role in maintaining the vitality of sports, keeping fans interested and inspired, and enhancing value. The promotion and marketing of championships and sporting events, the artistic designs of the logos of sports teams and sports competitions, the literature contained in game day programmes sold to fans and supporters, the merchandise, and the software of computer and online games are all copyrightable subject-matter. Revenues from broadcasting and media rights are often the main source of funds for sports organisations to build stadiums, host sporting events, and carry out community outreach to maintain high levels of interest.[4] Major sporting events can now be streamed or broadcast anywhere in the world, giving millions of fans the opportunity to participate in the excitement of an event .

Trade Secrets

Sports also generate an important volume of trade secrets that play a key role in competitive advantage and value creation. Teams gather proprietary information in the form of statistical analysis, scouting reports, dietary regimens, physiological metrics, and psychological assessment techniques—all to gain potential competitive advantage over their rivals.[5] Sports gear often features secret new compounds and materials to allow athletes to perform better. Companies invest heavily in elaborate focus groups to find the right mix of features and designs to make their products more attractive and marketable.

Juxtaposition of Trade Secrets and Patents/Design Rights

Patents and design rights are the publicly known aspects of the invention, while trade secrets encompass the undisclosed knowledge behind it. In exchange for disclosure the inventor obtains a patent that prevents others from copying the invention for a period of time. Conversely, there is no need to register trade secrets, and they can last indefinitely as long as the information is kept confidential. But protection is much more limited; others are only prevented from breaching the security measures in place. Moreover, competitors are free to independently develop that very same invention. Hence the two sides of the innovation coin: elements of an invention subject to reverse engineering are candidates for patent protection, while trade secrets can protect what is not apparent from examining the product. Often patents and other registrable forms of IP rights are the tip of the iceberg. The rest is knowledge acquired over time during many iterations of the development process. Some inventions, like the secret syrup formula for Coca-Cola for instance, are difficult if not impossible to determine how to copy and as such can be kept entirely secret indefinitely, as long as measures are in place to ensure their security. Trade secrets can take many forms in the world of sports, from proprietary information and processes used by individual teams and leagues to techniques and business strategies used by sporting goods and product manufacturers. Sports gear and equipment utilise undisclosed formulas, material, and processes, so, for example, golf balls can be more aerodynamic or skateboards can be lighter and stronger.[6] The development process of new products and designs takes years of prototyping and testing that must be kept secret to prevent tipping off the competition.

Conclusion

Sports have become a multi billion dollar global industry—one that generates investment in facilities, employs millions of people around the world, and entertains many more. We look at how sports businesses use patents and designs to foster development of new sports technologies, materials, training, and equipment to help improve athletic performance and engage fans worldwide.

We find out how trade marks and branding maximise commercial revenue from sponsorship, merchandising and licensing agreements. These revenues offset the cost of organising world class events, such as the Olympic Games and World Cup series, and ensure that the value and integrity of these spectacular events are safeguarded. We explore how broadcasting rights underpin the relationship between sport and television and other media that bring fans ever closer to sporting action. At their core, IP protections and incentives allow industries and individuals to prosper in their pursuit of innovation and brand development. This creates a synergistic and reinforcing effect. The development of new technologies strengthens a given brand; the strengthening of a given brand leads to the development of new technologies and products, which in turn further strengthens the brand. Additionally, the popularisation of a given sport leads to the development of related industries and technologies. Think of wearable fitness devices, which have led to the creation of a whole new sub-industry of app development. Similarly, there is a powerful symbiosis between individual players, their sports, their teams, the respective leagues, and related industries, including branding, sporting goods, and sportswear. The success of one part of this ecosystem leads to potential commercial opportunities and the development of new products and services for all related industries.


*Vaishali Singh is an Assistant Professor of Law, School of Law, University of Petroleum and Energy Sciences.

[1]    Reach for Gold: IP and Sports, see <https://www.wipo.int/ip-outreach/en/ipday/>.

[2]    The data produced by Google patents is from the respective patent offices, not from Google patents itself. See <https://cloud.google.com/blog/big-data/2017/10/google-patents-public-datasets-connecting-public-paid-and-private-patent-data>.

[3]    See  <http://www.wipo.int/ip-sport/en/>.

[4]    See <http://www.wipo.int/ipadvantage/en/details.jsp?id=3110>.

[5]    D.C. Lippoldt and M.F. Schultz, Uncovering Trade Secrets—An Empirical Assessment of Economic Implications of Protection for Undisclosed Data, OECD Trade Policy Papers, No. 167, OECD Publishing, p. 29.

[6]    The most durable skateboard deck ever, Tech StartUps. See <https://techstartups.com/2017/07/31/capsule-skateboard-durable-skateboard-deck-ever/>.

Supreme Court of The United States
Case BriefsForeign Courts

Supreme Court of United States: While determining that whether the ‘inter partes review’ established under the Leahy-Smith America Invents Act violates Article III or the Seventh Amendment of the US Constitution, the Court by a ratio of 7:2, held that, inter partes review does not violate the Seventh Amendment and Article III. When Congress properly assigns a matter to adjudication in a non-Article III tribunal, “the Seventh Amendment poses no independent bar to the adjudication of that action by a non-jury fact finder.”

As per the facts, in 2001, the petitioner Oil States Energy Services obtained a patent relating to an apparatus and method for protecting well-head equipment used in hydraulic fracturing. In 2012 however the petitioner company filed a suit against Greene’s Energy (the respondent in the present case) in Federal District Court for infringing that patent. At the same time, Greene’s Energy challenged the validity of the patent and instituted inter- partes review with the Patent Trial and Appeal Board. The inter- partes review was established by the Leahy-Smith America Invents Act, according to which any person other than the patent owner can file a petition for inter partes review. The petitioner can request cancellation of “one or more claims of a patent” on the grounds that the claim fails the novelty or non-obviousness standards for patentability; and the challenges must be made “only on the basis of prior art consisting of patents or printed publications.” Once inter partes review is instituted, the Patent Trial and Appeal Board—an adjudicatory body within the PTO created to conduct inter partes review—examines the patent’s validity.

Perusing the concerned laws and precedents on the point, the Court only addressed the constitutionality of inter partes review. A majority of 7 judges observed that the inter partes review falls within the public-rights doctrine as a decision to grant patents is a issue involving public rights, specifically the grant of a public franchise. Inter partes review is simply a reconsideration of that grant, and the Congress has permissibly reserved the United States Patent and Trademark Office’s authority to conduct such reconsideration. However John Roberts, C.J., and Gorsuch, J., delivering the dissenting opinion, observed that a political appointee and his administrative agents instead of independent judges are not the competent authority to resolve a patent dispute. Citing various precedents and procedure from the past, the Judges held that, “law traditionally treated patents issued under the Patent Clause very differently than monopoly franchises when it came to governmental invasions. Patents alone required independent judges and the decision of the Majority signals a retreat from Article III’s guarantees.” [Oils State Energy Services LLC v. Greene’s Energy Group LLC, No. 16–712, decided on 24.04.2018]

GNLU
Op EdsOP. ED.

 Vidya Dadati Vinayam, Vinaya Dadati Paatrataam I

Paatratva Dhanamaapnoti, Dhanaat Dharmam Tatah Sukham II

This shloka in Sanskrit means true/complete knowledge gives discipline, from discipline comes worthiness, from worthiness one gets wealth, from wealth one does good deeds, from that comes joy.

This ancient Sanskrit proverb resonates of the power and value of knowledge. It also echoes the need for protection of traditional knowledge, a branch under intellectual property rights (IPR) that spurt on the global platform with the finalisation of Convention on Biological Diversity (CBD), 1992.

A broad worded explanation of traditional knowledge is provided under Article 8(j) of the Convention, which reads as:

Traditional knowledge refers to the knowledge, innovations and practices of indigenous and local communities around the world. Developed from experience gained over the centuries and adapted to the local culture and environment, traditional knowledge is transmitted orally from generation to generation. It tends to be collectively owned and takes the form of stories, songs, folklore, proverbs, cultural values, beliefs, rituals, community laws, local language, and agricultural practices, including the development of plant species and animal breeds. Sometimes it is referred to as an oral traditional for it is practiced, sung, danced, painted, carved, chanted and performed down through millennia. Traditional knowledge is mainly of a practical nature, particularly in such fields as agriculture, fisheries, health, horticulture, forestry and environmental management in general.[1]

Traditional knowledge, as opposed to common belief, is not so called because of its antiquity. It is a living body of knowledge that is developed, sustained and passed on from generation to generation within a community, and often forms part of its cultural or spiritual identity. As such, it is not easily protected by the current intellectual property system, which typically grants protection for a limited period to inventions and original works by named individuals or companies. Its living nature also means that “traditional” knowledge is not easy to define.[2]

Protecting and promoting traditional knowledge is an amalgamation of various ideas like human rights, conservation of resources, sustainable development, intellectual property rights and benefit sharing mechanism. This work looks at traditional knowledge through the lens of intellectual property ecosystem.

In term of Intellectual Property (IP) protection for traditional knowledge, two types are being sought:

(i) Defensive protection which aims to stop people outside the community from acquiring intellectual property rights over traditional knowledge. India, for example, has compiled a searchable database of traditional medicine that can be used as evidence of prior art by patent examiners when assessing patent applications. Defensive strategies might also be used to protect sacred cultural manifestations, such as sacred symbols or words from being registered as trade marks.[3]

(ii) Positive protection under which there is granting of rights that empower communities to promote their traditional knowledge, control its uses and benefit from its commercial exploitation. Some uses of traditional knowledge can be protected through the existing intellectual property system, and a number of countries have also developed specific legislation.[4]

However, the international legal system has not surfaced with an instrument for specific protection of such traditional or indigenous knowledge and even though some national laws do accord protection, this may not hold sufficient for other countries.

India—An overview of wealth

India is a mega diverse country with only 2.4% of the world’s land area, harbours 7-8% of all recorded species, including over 45,000 species of plants and 91,000 species of animals. Of the 34 global biodiversity hotspots, four are present in India, represented by the Himalaya, the Western Ghats, the North-East, and the Nicobar Islands.[5] Further, India is the largest producer of medicinal plants and the traditional medicinal systems found under Ayurveda, Siddha and Unani, are concepts that were developed between 2500 and 500 BC in India.[6]

That India is a biologically diverse and the traditional knowledge possessed regarding various resources, especially the medicinal system, makes it a richer nation is understood, however such the possession of such knowledge must be both protected and promoted. India has undergone many struggles in trying to safeguard her traditional knowledge. These resulted from patents granted to corporations, for knowledge that is India’s legacy. I will enunciate three popular cases that brought to the fore the supposed “stealing” of Indian traditional knowledge and access of biological resources, in contravention of the Biological Diversity Act, 2002.

The Neem case

A controversy that can be tagged the “first” for India, and which rose doubts about a supposedly “strict” patent system, was the granting of patent to a company W.R. Grace. The company was granted a patent in the United States and the European Union, for a formulation that held in the stable storage of azadirachtin, the active ingredient in the neem plant; it planned to use azadirachtin for its pesticidal properties. Traditional systems of medicine like Ayurveda and Unani, identify antiviral and antibacterial properties of the neem tree also known as the “curer of all ailments” in Sanskrit, and prescribe the same for treating  skin diseases and as a natural pesticide. The applicant admitted in the patent application of how the pesticidal uses of neem were known and pointed out to the fact that storing azadirachtin for a longer duration is difficult. The US patent granted, covered a limited invention whereby the applicant was only given the exclusive right to use azadirachtin in the particular storage solution described in the patent.

The grant of the patent was followed by an uproar and it was challenged through re-examination and post-grant opposition proceedings before the United States Patent and Trade Mark Office (USPTO) and the European Patent Office (EPO), respectively. Though there was no success at the Uspto, the European Patent Office ruled in favour of the opposition stating the patent granted, lacked in novelty and inventive step.

The Turmeric case

As the USPTO and EPO were dealing with the Neem case, a similar matter was boiling; a patent was granted for “use of turmeric in wound healing” and claimed a method to heal wounds in a patient by administration of an “effective amount” of turmeric. Suman K. Das and Hari Har P. Cohly were the inventors of this patent and had later assigned the patent to the University of Mississippi.

A re-examination application was filed against the granted patent, along with nearly two dozen references, which resulted into early success. The inventors’ defence was proven weak in front of the modern commentaries on classic ayurvedic texts, extracts from Compendium of Indian Medicinal Plants and nineteenth century historical texts from the library of Hamdard University, resultantly in August 1997, the USPTO ordered revocation of the patent, which lacked novelty.

The Basmati case

Another case that created much havoc was a patent granted by the USPTO to an American company called RiceTec for “Basmati rice lines and grains”. Basmati rice is a traditionally grown aromatic variety of rice, in India and Pakistan. The grant of this patent created multitude IP issues besides that under the patent law i.e. under trade marks and geographical indications.

RiceTec had been granted patent for the invention of hybrid rice lines that combined desirable grain traits of Basmati rice with desirable plant traits; this was due to the inferior quality of Basmati rice that grew in US in comparison to the good quality Basmati rice being cultivated in northern India and Pakistan and would help in growing a better crop of Basmati rice in the western hemisphere, especially US. A re-examination request was filed, with declarations from two scientists, along with several publications on Basmati rice and the research conducted on the rice in India—one of which made the USPTO realise that core claims of RiceTec were non-obvious. This resulted into RiceTec not challenging the USPTO’s decision and reducing its twenty claims to three.

Traditional Knowledge Digital Library (TKDL)

In June 1999, the then Planning Commission under the Central Government constituted a “Task Force on Conservation and Sustainable Use of Medicinal Plants”.[7] One of its objectives included identification of measures to facilitate the protection of “patent rights and IPR of medicinal plants”. One among several recommendations of the Task Force, was creation of a library to ensure collation of traditional knowledge on one platform, which is available digitally and is helpful in proving to the world that traditional medicinal knowledge with India is prior art due to which, patent applications based on such knowledge will not fulfil the criteria of novelty.[8] Thus, a database of India’s traditional knowledge, took birth.

Traditional Knowledge Digital Library (TKDL), is a database of over 2,50,000 formulations used in traditional medicine systems in India, namely, Ayuveda, Siddha, Unani and Yoga. TKDL is a pioneer initiative of India to prevent misappropriation of country’s traditional medicinal knowledge at international patent offices on which healthcare needs of more than 70% population and livelihood of millions of people in India is dependent.[9]

The world has noted India’s move towards a defensive protection in preparing the digital library, so as to curb biopiracy and misappropriation of traditional knowledge. However, mere acknowledgement is not sufficient, rather the implementation of an equitable benefit sharing mechanism which is imperative.

In 2005, the TKDL expert group estimated that about 2000 wrong patents concerning Indian systems of medicine were being granted every year at international level, mainly due to the fact that India’s traditional medicinal knowledge which exists in local languages such as Sanskrit, Hindi, Arabic, Urdu, Tamil, etc. is neither accessible nor comprehensible for patent examiners at the international patent offices.[10]

Conclusion

Knowledge is wealth and traditional knowledge has immense potential to resolve man’s budding problems. Exploitation of this knowledge is extremely important but it must be coupled with protection, promotion and benefit sharing.

Traditional knowledge may be termed as the IP family’s newest member. However, the decisions on tackling this child have to be taken considering several factors, besides the (un)willingness of nations. Correctly put, the knowledge system of informal sector i.e. traditional knowledge, is often oral and not properly documented, thus non-defendable.[11] India has taken a step ahead and created a repository of its ages old knowledge, which grows periodically but at an international level the need of a legal instrument becomes increasingly urgent. The linking of traditional systems of knowledge with a modern IPR system is the question of relevance.

A sui generis law is often pitched in as a probable solution for proper protection of traditional knowledge, however till the time a legislation is formulated, policies and ideas like the National IP Policy, Digital India and Startup India can rescue the fast fading system of traditional knowledge. It will not be wrong to suggest, that in order to secure the future of species and mankind, the current generation will have to help protect a fading generation’s valuable knowledge.

 

*Hetvi Trivedi is Research Associate, GNLU-GUJCOST Research Centre of Excellence in IP Laws, Policies & Practices.

[1]  Convention on Biological Diversity, available at <https://www.cbd.int/traditional/intro.shtml>, last visited on 4-4-2018.

[2]  WIPO, Traditional Knowledge and Intellectual Property, available at <http://www.wipo.int/pressroom/en/briefs/tk_ip.html>, last visited on 4-4-2018 .

[3]  WIPO, Traditional Knowledge and Intellectual Property, available at <http://www.wipo.int/pressroom/en/briefs/tk_ip.html>, last visited on 4-4-2018.

[4]  Ibid.

[5] National Biodiversity Authority, India’s Fifth National Report to the Convention on Biological Diversity, 2014, available at <http://nbaindia.org/uploaded/Biodiversityindia/5th_NationalReporttoCBD.pdf>, last visited on 4-4-2018.

[6] M.M. Pandey, Subha Rastogi and A.K.S. Rawat, Indian Traditional Ayurvedic System of Medicine and Nutritional Supplementation, Evidence-Based Complementary and Alternative Medicine (2013), available at <https://www.hindawi.com/journals/ecam/2013/376327/cta/>, last visited on 5-4-2018.

[7]  V.K. Gupta, An Approach for Establishing a Traditional Knowledge Digital Library, 5 JIPR 307 (2000), available at <http://nopr.niscair.res.in/bitstream/123456789/26010/1/JIPR%205%286%29%20307-319.pdf>, last visited on 4-4-2018.

[8]  Prashant Reddy T., Sumathi Chandrashekaran, Create, Copy, Disrupt: India’s Intellectual Property Dilemmas, 271 (Oxford University Press 2017).

[9]  Traditional Knowledge Digital Library, available at <http://www.tkdl.res.in/tkdl/langdefault/common/Abouttkdl.asp?GL=Eng>, last visited on 4-4-2018.

[10]  Ibid.

[11]  V.K. Gupta, An Approach for Establishing a Traditional Knowledge Digital Library, 5 JIPR 307 (2000), available at <http://nopr.niscair.res.in/bitstream/123456789/26010/1/JIPR%205%286%29%20307-319.pdf>, last visited on 4-4-2018.