Quicker, easier and cheaper? New Rules for patent prosecution in India

Date: 2016-05-25
Author: Karen Bentley

Several notable amendments to India’s patent Rules came into effect on 16 May 2016, following the publication of draft Rules in November last year. The new Rules, which seek to fast track applications and introduce a number of cost savings, are hailed by many as a positive step towards streamlining the patent application process as part of the Government’s efforts to improve the ease of doing business in India. Indeed, they have set an ambitious goal of reducing the existing 5 to 7 year time frame for receipt of the first examination report to just 18 months by March 20181. The objective, as explained by Rajiv Aggarwal, Joint Secretary, Department of Industrial Policy and Promotion, is “to popularise India as a patent filing hub so that more companies file applications in India”.

The Rules however do very little, if anything however, to ease the broader concerns of companies (especially pharmaceutical companies) when it comes to the substantive barriers posed by the current legal and regulatory systems.

Summary of the key changes

i) Examination, once commenced, will be faster

- The time for responding to an examination report is reduced from 12 months to 6 months with an extension of up to 3 months permitted for requests made before expiry of the 6 month period. This contrasts with the draft Rules from November 2015 which had proposed a reduction from 12 months to 4 months with a 2 month extension permitted.

- The Controller is bound to dispose of the application within a period of 3 months from the date of receipt of the last reply to the first examination report or within a period of three months from the last date to put the application in order for grant, whichever is earlier. Interestingly, this is a shorter time frame than the 6 months proposed in the draft Rules.  What isn’t clear is what, if any, recourse patent applicants have in the event that the Controller fails to abide by these deadlines.

- The processing of divisional applications has been improved with the Rules providing that if the parent application has already been referred for examination, any divisional application at the time of filing will have to be accompanied by a request for examination.

ii) Filing applications will be cheaper

- At national phase entry into India, the Rules now allow deletion of claims at the time of filing an application, which can result in substantial savings in excess claim fees.

- Filing fees for sequence listings has now been capped and will only be payable for the first 150 pages.

- Provided the application has not been referred for examination, 90% of the official examination fee can be refunded if the applicant decides not to proceed with the application. It is hoped that this offering will help clear the backlog of cases where the applicant no longer has an interest in proceeding.

iii) Examination can be expedited

- The new Rules offer applicants expedited examination, provided that:

(a) The applicant has chosen the Indian Patent Office as the International Searching Authority and/or International Preliminary Examining Authority in the corresponding international application; OR

(b) The applicant is a start-up (see below for more on this).

- Under expedited examination, the examiner must issue a report within 1 to 2 months of the application being given to an examiner.

- But this is only one month earlier than mandated for ordinary examination. The bottleneck, which sees many applicants waiting 5 to 7 years to receive the first examination report following the filing of the request for examination is the Controller referring the application to the examiner. In order to offer a benefit to applicants, the referral process by the Controller must also be expedited. But will this be at the expense of applications progressing on the ordinary examination pathway, queue jumped by the expedited cases? That remains to be seen, and will presumably be subject to the uptake of expedited examination by applicants. 

A number of other procedural and formality changes have also been introduced by the new Rules. 

“Start-up” entities

The new Rules define a start-up to be an entity within 5 years of its incorporation or registration, with a turnover of less than INR 25 crore (approx. USD4 million) in any financial year within those first 5 years. The start-up cannot have been formed by splitting up or reconstruction of a business already in existence. Moreover, the start-up must also be considered to be working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property (this point obviously being subjective and therefore open to interpretation).

This is quite a broadening from the original proposal, whereby the alternative to option (a) was that the applicant (or a licensee/assignee/partner) must have started manufacturing of the invention in India at the time of filing the request, or that they undertook to commence doing so within 2 years from the date of grant of the patent. The final Rules are a welcome relief for applicants given the burden for many to meet either criteria, and non-compliance was to be a ground of opposition and revocation. 

Will the intention of the new Rules translate to reality?

The question remains as to whether the new Rules will achieve their desired effect of faster and more streamlined examination. Other than a request for expedited examination, the new Rules do nothing to fast track examination being commenced – which is the current bottleneck. Indeed, the added pressure placed on examiners to comply with the requirement to dispose of the application within 3 months may have the unintended consequence of it taking longer for examination to commence. Especially if expedited examination requests take priority in the queue.

The government however has reportedly sanctioned 481 additional positions in the office of Controller General of Patents Designs and Trademarks and a short term measure of 263 contract positions2. This should help to alleviate some of the existing backlog of pending applications and increase the flow of applications commencing examination.

1. http://www.thehindu.com/business/Industry/now-a-tatkal-system-to-expedite-patent-examination/article8612218.ece
2. http://indianexpress.com/article/business/business-others/intellectual-property-rights-new-policy-may-power-rd-national-growth-2804419/