Patent protection for Japanese businesses in India

The covid-19 pandemic has been a catastrophe for India, but most experts believe the worst is over for India’s economy. India has already started one of the world’s biggest vaccination programmes and policymakers have started working on the recovery process. The country is likely to avoid recession, and may observe decent economic growth this year after improvement in the current pandemic situation.

India-Japan relations have traditionally been very strong, and the people of both countries have engaged in cultural and business exchanges for centuries. In today’s world, the partnership between India and Japan needs to be further strengthened.

The influence of a robust intellectual property rights (IPR) regime on propensity towards business investment is well documented. Bilateral co-operation between India and Japan in the field of IPR protection, particularly with patents, has been impressive so far.

The impact of patent rights may vary across industries, but there is no doubt about the importance of obtaining patents and enforcing them to safeguard business interests, especially after making huge financial investments. On that note, obtaining patent protection in India is fairly easy, and offers multiple benefits.

First of all, India is a huge market with a massive consumer base, therefore filing a corresponding patent application should not be ignored for that reason alone. Besides, the overall cost of obtaining patent protection is far lower when compared to advanced jurisdictions like the US and Europe. The basic official fee for a patent application is only US$110, and with India being a very competitive market, the professional fee for patent services is also reasonable.

Another upside is that the Indian Patent Office (IPO) accepts the English language, which means no translation in native languages is required for filing and prosecuting patent applications in India. This leads to a significant reduction in the overall cost of patenting compared to comparable jurisdictions like China, Brazil and South Korea, which all require native-language translations.

India and Japan also have a Patent Prosecution Highway (PPH) agreement in place, on a trial basis, for three years. This means Japanese applicants can seek an expedited patent examination in India based on a corresponding patent allowed by the Japanese Patent Office (JPO). The PPH trial has already entered into its second year and been quite successful so far. It would be reasonable to expect that an India-Japan PPH will be permanently implemented once the trial period is over.

Various other initiatives have been taken in the past few years to improve the overall Indian patent ecosystem. One of the most important improvements is the significant reduction of time taken by the IPO for examining a patent application under the normal route. As of now, the average time of examination is about 18 months from the date of filing of a request for examination, and patents are generally granted within three years of filing, as against the seven to eight years it used to take not so long ago.

In the case of applicants availing an expedited examination procedure, the grant time can be further reduced to about 12 months from the date of filing a request. With the issuance of examination guidelines specific to the field of inventions, the IPO is also trying to improve the quality of patent examinations, particularly in the areas of computer-implemented inventions, pharmaceuticals and biotechnology.

The IPO has also revised its manual of patents to streamline various practices and procedures concerning the Patents Act and Rules, to provide a better experience for patent applicants.

The Indian government made some significant changes to the Patents Rules in 2020, the most significant of which is with respect to the filing of working statements for granted patents. With effect from 19 October 2020, the government has introduced a new and simplified format for filing annual working statements (form 27) in respect to granted patents. This subject had been under discussion with the government and stakeholders for many years.

Now, under the amended rules:

(1) One working statement can be filed in respect of multiple related patents;

(2) the period to be covered in the annual statement has been changed to “financial year” from “calendar year”;

(3) the last date for filing the statement has been changed from 31 March every year to 30 September; and

(4) the requirement for providing the quantum of patented product manufactured and/or imported into India, the details of licences, and ascertaining whether the reasonable requirement of the public in India in respect of patented invention has been met or not, are not required anymore.

Another change, or clarification, has been with respect to the submission of certified priority documents and their English translation. The amended rules provide that applicants need to file an English translation of a priority document only in cases where PCT Rule 51bis.1(e)(i) or (ii) are applicable, which means an English translation of a priority document is to be submitted only if, in the international search report, one or more valid prior art references having a date between the earliest priority date and the international filing date of the application, are cited.

With respect to providing further impetus to small entity applicants, whether Indian or foreign, the amended rules now prescribe the same official fees for small entities as payable by natural persons and startups, i.e., a reduced fee.

The government and other authorities have taken proactive steps to ensure the smooth functioning of the IPO during the pandemic. IP filings in India were not interrupted by the number of lockdowns, and all IP applications were, and continue to be, filed electronically. The applications are being duly processed by the IPO, with some officials working from their offices and others from home. Hearings in patent applications are being conducted through videoconferencing. From the applicant’s perspective, it is pertinent to note that all timelines under all IP laws in India were extended from 15 March 2020, and are still under the extension period.

The extension of timelines was announced by the Supreme Court of India on 23 March 2020, and came into effect from 15 March 2020, due to the spread of the pandemic. The Supreme Court, while issuing the extension order, left the end of the extension period open-ended, to be later decided once the covid-19 situation comes under control.

On March 5, 2021, the Supreme Court reviewed it decision and observed that in view of the changing scenario relating to the pandemic, the extension of limitation has served its purpose and should come to an end. Accordingly, by an order dated March 8, 2021 the Supreme Court has ended extension of limitation period introduced in light of covid-19 and now 90-day period after March 15 can be availed for completing pending actions.

The Intellectual Property Appellate Board (IPAB) of India, which was non-functional for almost three years, has also been made fully functional. Justice Manmohan Singh, a retired judge from Delhi High Court, was appointed chairman of the board last year. Despite that appointment, the board could not fully work for patent appeal and revocation cases, as there was a vacancy in the post of the member (technical).

As per the board rules, the board’s quorum to hear patent cases is completed only when the chairman and the member (technical) sit together on the board. The government appointed BP Singh, a former controller of patents at Delhi Patent Office, as the new member (technical), and since then the board is holding hearings in patent appeal cases and trying to clean up the backlog as soon as possible. The board is holding hearings every week and the rate of disposal is quite reasonable.

That is why most of the stakeholders have criticised the government’ s recent proposal to abolish Intellectual Property Appellate Board (IPAB) via Tribunal Reforms Bill, 2021. If the attempt to abolish IPAB is directed towards the establishment of special IP courts, then it is a welcome move towards strengthening the IP protection and enforcement system in India. Otherwise, it would be a step backward as it will take considerable time and resources of the courts to adjudicate on the IP matters.

After the lifting of the first lockdown in April 2020, almost all high courts, and the Supreme Court of India, started holding hearings in urgent matters via videoconferencing. Later, the courts expanded the categories of urgent cases to include IP cases seeking interim or preliminary injunctions. The courts in India have also revamped their information technology infrastructure since the outbreak of the pandemic.

Most courts now allow the filing of pleadings and documents electronically, and communications related to such filings are sent via email. Judges usually operate from their home offices, and lawyers also attend hearings from either home or the office. Now, the option to attend the physical hearing is also being provided.

Some noticeable trends that have become more apparent in recent years include the reduced waiting time for examination, the faster disposal of patent applications, a steady increase in the number of patent applications filed, continual and progressive legislative reforms, and an increase in the number of patent litigations for either enforcement or invalidation.

All these trends signify the development of a conducive IP system in India, to incentivise technology transfer and to boost foreign direct investment.

Article by Joginder Singh and Rajeev Kumar
1st published in Asia Business Law Journal.