LETTER FROM INDIA

INTELLECTUAL PROPERTY

CORPORATE LAW

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Issue 18 May 2005

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A decade and a half ago, India's burgeoning population was deemed the villain impeding her developmental process. How the tables have turned! A leading daily recently ran the following headline - 'Thank God We Failed at Population Control'. Having neglected the value of abundant human and intellectual capital for so long, the process of coaxing the necessary fundamentals into place in various socio-economic sectors, including the legal, is now on at full steam. These changes make for an engaging study, which we have been highlighting in our past issues of Letter from India.

In fact, in the January issue we mentioned promulgation of the Patents (Amendment) Ordinance, 2004 which made significant changes to the existing law. In its place, Parliament has now enacted The Patents (Amendment) Act, 2005, which has been given retrospective effect from January 1, 2005, (except the provisions relating to the Appellate Board). There have been further changes to the law as introduced by the Ordinance, particularly in the context of the pharmaceutical industry. The salient features of the Act are as follows:

• Product patents have been introduced in all fields of technology. Accordingly, inventions in areas such as chemicals, food and pharmaceuticals hitherto entitled to process patents would now become eligible for product patent protection. However, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other derivatives of a known substance have been excluded from patentability unless they differ significantly in properties with regard to efficacy.
• The original provision prohibiting the patentability of inventions relating to computer programmes per se has been reinstated. Thus, computer programmes per se do not come within the purview of patent protection.
• The facility relating to Exclusive Marketing Rights ('EMRs') and a transitional provision for an automatic and priority examination process for black box applications linked to EMR applications has been discontinued.
• Pre-grant opposition has been replaced with post-grant opposition procedure. The opposition period will stretch for one (1) year from the date of publication of grant of the patent. A provision for making a representation by way of opposition against a pending patent application is also envisaged. It has been strengthened by making all eleven grounds of post grant opposition applicable thereto as well as providing for a hearing at the pre-grant opposition stage to the third party.
• The rules also provide for an opportunity to the applicant to file his statement and evidence in support of his application. These are practically opposition proceedings even though the nomenclature used is representation A provision for enabling grant of compulsory licenses for export of medicines to countries which have insufficient or lack of manufacturing capacity for meeting public health emergencies has been introduced (in line with the Doha Declaration).
• The law also enables a claim for damages in an infringement action retrospectively from the date of publication and not from the date of acceptance of the patent application as was provided earlier. However, in the case of Black Box applications, damages can be claimed only from the date of grant.
• A patent holder in respect of a patent granted on a Black Box application, is prohibited from instituting an infringement suit against enterprises which have made significant investment and were producing and marketing the concerned product prior to January 1, 2005 and which continue to manufacture the product covered by the patent on the date of grant of the patent. The patent holder shall only be entitled to receive reasonable royalty from such enterprises.
• The denial of injunctive relief to a patent holder is unprecedented and ex-facie violates the letter and spirit of the TRIPS Agreement as well as our Constitutional norms. We expect that sooner, rather than later, this amendment would be put to test in the highest instance.
• The definition of 'inventive step' has been modified to - 'a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art'.
• A fresh definition has also been introduced vis-à-vis a 'new invention'. The term is defined as - 'any invention or technology which has not been anticipated by publication in any document or used in the country or elsewhere in the world before the date of filing of patent application with complete specification, i.e. the subject matter has not fallen in public domain or that it does not form part of the state of the art'.
• The new definition of 'pharmaceutical substances' is - 'any new entity involving one or more inventive steps'.
• A provision for requesting early publication of an application has been introduced.
• Request for examination of an application to be made after publication of the application but within thirty six months from the priority date or date of filing of application, whichever is earlier, as opposed to the earlier period of forty eight months from the filing date.
• The time frame for putting an application in order for acceptance subsequent to its first examination has been further shortened to six (6) months, extendible by three (3) months, from the date on which the first statement of objection is issued. The time frame for putting an application in order for grant (which has been examined before January 1, 2005) remains a non-extendible twelve months.
• Provisions relating to 'first filing' in India for an Indian resident with respect to an application relating to any invention have been re-introduced.
• Substantive increase in official fee in respect of various activities, for example, an additional official fee will now be levied in all cases where the pages of specification exceed thirty (30) and the number of claims exceed ten (10).
• The requirement of payment of a sealing fee has been dispensed with.

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In the trade mark world, the following decisions merit a mention In Bhagwant Lal Chaman Lal Vs. Shulton Inc. & Anr. and Shulton Inc. Vs. Bhagwant Lal Chaman Lal & Anr., Bhagwant Lal Chaman Lal had filed applications for registration of the mark 'OLD SPICE' in classes 8 and 21 in respect of 'safety razors' and 'shaving brushes' respectively. Both applications were opposed by Shulton Inc. on the strength of prior registrations and long standing use of the mark in respect of men's toiletries. While the Registrar allowed Shulton Inc.'s opposition to the class 8 application, he dismissed the second opposition vis-à-vis the class 21 mark primarily on the ground that the goods covered were different from those Shulton Inc.'s . Subsequently, both parties filed appeals from the respective orders of the Registrar which were heard by the Intellectual Property Appellate Board ('IPAB').

The IPAB observed that whether two sets of goods were of the same description or not is a question of fact and the same has to be looked at from a practical, business and commercial point of view. While discussing Lord Reid in Daiquin Rum TM {1969, RPC 600(HL)}, the Board held that in the instant case, there was enough to hold that the goods under the rival marks were of the same description and nothing on record to conclude that the marks were unlikely to deceive or cause confusion. As regards the question of honest and concurrent user, the IPAB was of the view that the user claimed by Bhagwant Lal Chaman Lal was insufficient when weighed against the other elements required for eligibility under this exception. Accordingly, both applications made by Bhagwant Lal Chaman Lal for registration of the OLD SPICE mark were refused registration.

Another matter which came up before the IPAB was Aktiebolaget SKF Vs. Sardari Lal & Sansar Chand & Anr. Sardari Lal had filed an application for registration of the trade mark 'SKE' in class 12 in respect of timing chains for use in automobiles with a user claim dating back to January 1972. The said application was opposed by Aktiebolaget SKF on the basis of prior registrations of the mark 'SKF' in several classes. Although Sardari Lal did not tender any evidence in support of his application and nor was he represented at the hearing before the Registrar, the Registrar, nevertheless, went on to hold that on account of user, Sardari Lal's mark had acquired distinctiveness. It was further held that the rival marks were distinct and dissimilar from each other and the opposition was disallowed.

Aktiebolaget SKF went up in appeal and the IPAB observed that in view of the registrations enjoyed by the Appellant as well as use running from 1942, there was not a shred of doubt that the Appellant's mark had acquired distinctiveness in the market. It was held that the Registrar had erred in holding that the rival marks were distinctive merely on account of the fact that Sardari Lal's mark ended with the alphabet 'E', for 'E' and 'F' bore too much of a resemblance in their geometrical presentation which would lead to confusion in the reading of the rival marks. The goods being cognate combined with the high reputation of the Appellant's mark in the automobile industry, there was every likelihood that the impugned mark 'SKE' would deceive and cause confusion. The appeal was accordingly allowed and Sardari Lal's mark 'SKE' was refused registration.

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News slightly off the usual track is that the New Delhi Trade Marks Registry is moving to new premises near the Delhi International Airport, which would be replete with all the facilities of a modern workplace. In fact, the new site would mark the consolidation of IP Offices as the same building would also house the Patent Office. We are hopeful that this consolidation would lead to greater synergies and work efficiency.

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India's march towards compliance with the international trade regime has created some ripples. But then, it's not an easy task to keep all the 1.1 billion people happy at home, not to mention satisfying the legitimate interests of the other 4.9 billion people in the world! Of course, the cut and thrust of ongoing debates provide food for thought and make our journey forward much more exciting.

© Remfry & Sagar May 2005

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"Letter from India" is intended to provide our clients and associates with information of general nature on legal issues and recent developments in the areas of intellectual property, foreign investment and corporate laws. It should not be relied upon as legal advice or opinion.