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S&A IP-Tech
Volume IV, Issue III
INTELLECTUAL PROPERTY AND TECHNOLOGY LAW UPDATES
E-337, East of KailashNew Delhi - 110065, INDIA
GURUGRAM7th Floor, ABW Tower, MG Service RoadSector 25, IFFCO Chowk, GurugramHaryana - 122001, INDIA
BENGALURUUnit No. 101, 10th Floor Sakhar Bhavan, Plot No. 230Ramnath Goenka MargNariman Point, Mumbai - 400021, INDIA
Condor Mirage, 101/1, 3rd FloorRichmond Road, Richmond TownBengaluru - 560025, INDIA
EDITORIAL
Contents
Attempts to Improve the Patent Filing in India............................................................................02Arguing Inventive Step using Counter-Intuitive (CI) Approach..................................................04Tax Benefits to IP owned companies in India………..................................................................06Consequences of Missing the Deadline for Filing PCT .............................................................10Patent vs Research Paper Publication...........................................................................................12Biodiversity Related Patents: Indian Scenario.............................................................................14
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ATTEMPTS TO IMPROVE THE PATENT FILING IN INDIADr. Heena Lamba
It is now sometime since the importance of filing patent applications and related monetary benefits is being realized in India. This is quite evident from the various amendments brought forward from time to time by the Indian Patent Office to streamline the complete process of Patent Filing in India. Recent amendments enforced in September 2019 are also an addition to the attempts of the Patent Office to ease and streamline the whole process. The amendments include reducing the costs for startups and small entities and extending the provision of expedited examination to small entity, female applicant and even to the Government departments and companies other than startups and to those applicants who have indicated India as the competent International Searching Authority or International Preliminary Examining Authority. The provision for expedited examination greatly reduces the time for an application to be put in order for grant which encourages and provides thrust to small scale and budding industries to get involved in innovations and obtain rights for the same.
In addition, it is pertinent to mention here that the Patent Office has streamlined the whole process of Patent filing and Prosecution not just for the above said applicants but for all applications in general. As against the delaying trend followed earlier, it is now seen that the Patent Office has now become proactive in catering to various requests and amendments filed. The same is evident from the visible attempts of the patent office to strictly adhere to the timelines w.r.t. publications, and processing requests for recordal of changes or amendments, revocations, issuing First Examination Reports, timely issuance
of hearing dates and providing results for the same. Even the provision for filing original documents has been restricted just to e-filing and to be submitted in hard copy within fifteen days only when it is required by the Controller. Streamlining of the above process has considerably reduced the efforts and the time required for final decision on an application filed in India. The patent office has also become vigilant in rectifying the shortcomings or errors in online records or IPAIRS for various applications and patents, which has simplified and eased the process of annuity payments which in turn ensures efficient maintenance of patents after grant. As per the annual report issued by the Office of the Controller General of Patents, Designs, Trademarks and Geographical Indications, India, filing of patent application has increased by 5.3%, while domestic filing has increased to 32.5% from 29.2% in 2016-17 and the number of patent applications examined more than doubled (108.2% increase) over previous year while grant of patents increased by 32.5% and disposal of applications increased by 57.6% in 2017-18. The recent amendments in the Patent Rules have been effected in order to further improve the numbers of applications filed and granted in India.
Apart from streamlining and improving the process of patent filing and prosecution, a possible emphasis has also been made by the Indian Patent Office to increase the patent professionals in India to support the patent infrastructure which is expected to grow in future. The same is evident from the attempts of the Indian Patent Office to conduct Patent Agent Exam on timely basis unlike once in two or three years as was the case previously.
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With the increased efforts of the Indian Patent Office to ease the process of patent filing in India and the policies related to the same, we expect that there would be an increase in the number of patent filings in the coming future. These applications will not only include convention or PCT National Phase application but also the new ordinary applications being filed by the prospective applicants in India as envisaged by the Department for Promotion of Industry and Internal Trade (DPIIT).
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ARGUING INVENTIVE STEP USING COUNTER-INTUITIVE (CI) APPROACH
Aditya Sharma
Background – The Inventive Step ObjectionMost of the patent applications filed with the Indian Patent Office face substantial objections from the Controller regarding their patentability. The most common substantial objection associated with patentability pertains to lack of inventive step in the claimed subject matter. Generally, the controller rejects the claimed invention for “lacking inventive step” or “being obvious” in view of the asserted combination of the prior arts or common knowledge. When the controller asserts a combination of the prior arts to render the claimed subject matter lacking inventive step, it becomes difficult to persuade the controller that it would not be obvious for the person having ordinary skills in the art (PHOSITA) to exercise (practice) the combination of the prior arts, as asserted by the controller.
Introduction to Counter-Intuitive (CI) ApproachThe CI approach is a way for strengthening the applicant’s arguments based on the “Prior art Teachings and Motivation”. The CI approach establishes the non-obviousness of the claimed subject matter based on known disadvantage(s) of the combination(s) of cited prior arts.
The Counter-Intuitive (CI) Approach – When and Why
Generally, while responding to the obviousness objections, the arguments are presented pointing out that the prior art(s) neither teaches about the asserted combination nor motivates to exercise the asserted combination, to the PHOSITA.
In case(s) when the controller asserts the combination the prior arts based on common sense or common general knowledge, it is difficult to present the evidence of lack of motivation in the prior arts for their combination or modification of the closest prior art in light of the other cited prior arts.
In such case(s), the CI approach can be helpful for strengthening the arguments pertaining to lack of teachings or motivation in the prior arts for their combination or modification of the closest prior art in light of the other cited prior art(s).
In the CI approach, the arguments are based on the well-known disadvantage(s) of the controller asserted combination of the prior arts. Such arguments help in convincing the controller that “for a person skilled in the art, it would not be obvious to go against the well-known facts and combine the prior arts”. Further, presenting arguments based on the well-known disadvantage(s) of the asserted combination helps the applicant to traverse the common-sense reasoning for combining the prior arts provided by the controller.
Exemplar Implementation
In a hypothetical situation, the claimed subject matter relates to a hydroponic plant growth system for nutritional growth of the plant in highly humid conditions. Specifically, the novelty of the claimed subject matter resides in employing gaseous ozone as fumigating agent for preventing mould formation during the growth phase. When the controller will begin the search for prior arts, most likely, he would find document(s) describing hydroponic growth
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systems and document(s) describing the use of gaseous ozone as an anti-fungal fumigation agent for removal of mould from seeds prior to storage.
In this particular case, the claimed subject matter would be novel as none of the cited document(s) discloses about novel feature of “employing gaseous ozone as fumigating agent in the hydroponic system for preventing mould formation during the growth phase”. However, the controller would issue an objection pertaining to lack of inventive step with the reasoning that it would be obvious for PHOSITA to combine the prior art documents describing hydroponic growth systems and use of gaseous ozone as an anti-fungal fumigant for seeds.
The controller might present the reasoning that “even though the evidence of specific hint or suggestion are missing in the cited documents for their combination, the PHOSITA when presented with the problem of mould growth in the hydroponic system would then consider using the gaseous ozone for fumigation, by using his/her common general knowledge in light of the second document”. Therefore, it would be difficult to traverse the reasoning provided by the controller in support of the asserted combination.
Further, the situation would be more complicated in absence of any explicit evidence(s) of “teaching away” from the asserted combination in the prior art(s).
In this scenario, arguments based on the CI approach could be used to traverse the controller’s assertion of combining prior arts. Specifically, in this example, the applicant could argue stating it is well known in the art that the ozone is a plant growth inhibitor and interferes with the process of photosynthesis.
Therefore, the PHOSITA would not be motivated to act against the well-known fact and combine the teachings of the prior art documents, as it would be counter-intuitive for him.
The applicant should also explain why the claimed subject matter is working without showing the disadvantages, which the applicant has mentioned earlier and what are the specific conditions or configurations described in the application which are responsible for eliminating the specific disadvantage(s). In this specific example, the claimed hydroponic system with gaseous ozone fumigation does not show the effect of plant growth inhibition due to the conditions of high humidity and nutritional growth.
Also, it is necessary to do not go overboard in describing the disadvantages as it might pursue the controller against the claimed subject matter. Further, for implementing the CI approach, the applicant should present the publicly available well known data to the controller in support of the arguments submitted. Additionally, the applicant may provide reference for the data presented in the response.
Conclusion
In a nutshell, it is always beneficial to strengthen the main line of arguments with technically supporting approaches while responding to objections of lack of inventive step. As discussed above, the CI approach can be used as the supporting approach. Using supporting approaches increases the chances of pursuing the controller for allowing the claimed subject matter to grant.
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TAX BENEFITS TO IP OWNED COMPANIES IN INDIAAayush Sharma.
In recent years, Government of India has created a tax regime in India specially for IPR. With the rapid increase in economic development of the nation, requirement for the IPR development is a pressing need of the hour. By way of a healthy tax structure, the IPR can be escalated to the utmost level and maximum benefits can be given to the inventors for securing an innovation culture in the country. It has been seen that many startup companies do not promote or fail to promote their IP because of the future financial loss or lack of knowledge. A better taxation model may catalyze the research and development of intellectual property assets in such startups and they may think to rejuvenate the IP. Also, a good IP taxation regime and efficient royalty policies would persuade the authors and artists to come up with more original & artistic works and expand the number of technologies or know-how transfers into India.
First, let us discuss the tax benefits and the benefits to Startup/ SMEs:
SECTION 80 IAC: Post getting recognition, a startup may apply for tax exemption under section 80 IAC of the Income Tax Act. Section 80 IAC of Income Tax Act, 1961, provides for Income tax exemption to recognized startups for any 3 consecutive years out of a block of 7 years (10 years for startups from Bio-Technology Sector) from the date of its incorporation. Eligibility criteria for applying to income tax exemption (80IAC) are:
o The entity should be a recognized startup
o Only Private limited or a Limited Li-ability Partnership is eligible
o The startup should have been incor-porated after April 01, 2016
Section 56: Angel tax1 - Post getting recognition, a startup may apply for Angel Tax Exemption. Eligibility criteria for tax exemption under Section 56 of the Income Tax Act are:
o The entity should be a DPIIT recognized startup
o Aggregate amount of paid up share capital and share premium of the startup after the proposed issue of share, if any, does not ex-ceed INR 25 Crore.
Other Benefits for Intellectual Property for startups:
o Fast tracking of patent applications
o Expedited examination
o 90% reduction in official fee
o Waiver of professional fee
SMEs: Support for International Patent Protection in E&IT (SIP-EIT) is a scheme launched by the Department of Electronics and Information Technology to provide financial support to MSMEs and Technology start-up units for international patent filing. SIP-EIT scheme captures the growth opportunities in the area of information technology
1 https://economictimes.indiatimes.com/news/economy/policy/startups-get-angel-tax-breather-277-startups-secure-all-clear-from-income-tax-department/articleshow/68839481.cms?from=mdr
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and electronics. This scheme encourages indigenous innovation and also recognizes the value and capabilities of global IP. The reimbursement limit has been set to a maximum of Rs. 15 lakhs per invention or 50% of the total charges incurred in filing and processing of a patent application, whichever is lesser2.
There are various sections introduced by government in the Income Tax Act, 1961, such as sections 32(1)(ii), 35A, 35AB, 80 GGA, 80-O, 80OQA, 80QQB, 80RRB etc.
Currently, the manufacturing of an IP includes various transactions which are taxed separately:
Deduction: The capital used for research and development of an IP which is the pre-existing stage including the analysis cost, manufacturing cost, etc is treated as an ex-pense which is to be deducted from the gross income for further calculation of income tax.
Income: The income received as royalty by transfer of IP is treated and taxed under the Income Tax Act, 1961. To promote innova-tion in the country, royalty income is given tax incentives.
GST: Tax on Sale/ Transfer/ Licensing/ As-signment of the intellectual property.
Once the IP is created, it can be commercialized either by integrating it into products and selling them or the right to use the IP can be transferred temporarily or permanently, and is subject to taxation
2 SIP-EIT Scheme, https://www.indiafilings.com/learn/sip-eit-scheme/
under the Indian Taxation system of direct and indirect taxes.Royalty: Royalties are taxable income and
also a business expense. If you receive roy-alties from someone for use of your property, you must claim these payments as business income. Royalty income is taxable in respect of any right, property or information used or services utilized by a non-resident, in India or for the purposes of making or earning any income from any source in India. If such in-come is payable in pursuance of an agree-ment made before the 1st day of April 1976, and the agreement is approved by the Cen-tral Government, is not taxable.3
Depreciation: Section 32(1)(ii) of the Act accounts for depreciation of the intellectual property as expenditure for the purpose of calculation of income tax.
Expenditure: Section 35A of the Income Tax Act 1961, explained the expenditure on ac-quisition of patents and copyrights rights.
o Depreciation over the acquired pat-ents and copyrights shall be claimed over a period of time when the con-sideration is paid in lump sum. In a scenario where the consideration is paid on periodical timeline, the de-preciation can be claimed as expen-diture fully incurred for the purpose
3 Section 9(1)(vi) of The Income Tax Act, 1961
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of business. Provided any expen-diture incurred after the 28th day of February 1966, but before 1st April 1998, on the acquisition of patent rights or copyrights for the purpose of business, deductions will be al-lowed for each of the previous years on an amount equal to the appropri-ate fraction of the amount spread over 14 years.
o Deductions are not applicable to amalgamating companies in the case of amalgamations, if the amalgamat-ing company sells or otherwise trans-fers the rights to the amalgamated company (being Indian company).
Section 35AB states that where the assesse has paid any lump sum consideration for acquiring any know-how for the use of his business, the expenditure for the same shall be deductible in six equal installments for six years:
o one-sixth of the amount so paid shall be deducted in computing the profits and gains of the business for that pre-vious year, and
o the balance amount shall be deducted in equal installments for each of the five immediately succeeding previ-ous years.
Deduction: Section 80 GGA talks about certain other deductions for scientific research which are provided under the head “deduction in respect of certain donation for scientific research or rural development” – Any sum paid for scientific research or to a university, college or institution to be used
for scientific research. The research work for the development of a patent comes under the umbrella of scientific research.
Under present laws, expense deductions and additional weighted deductions are permitted to all taxpayers for R&D expenditure. Such weighted deduction is restricted to 150% of the expenditure from tax year 2017/18 to tax year 2019/20. Thereafter, deduction will be restricted to 100% of the expenditure.
Section 80O provides and that no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005, and for subsequent years for income from patents.
Section 80 OQA states that a deduction of 25% shall be allowed from any income obtained by the author in exercise of his profession on account of any lump sum consideration for the assignment or grant of any of his interests in the copyright of any of his books or of royalty or copyright fees.
Exceptions to 80 OQA: No deduction in case of:o Dictionary
o Thesaurus
o Encyclopedia,
o Any book that has been added as a textbook in the curriculum by any university for de-gree of graduate or post graduate course of the university, or
Any book which is written in any language specified in the 8th schedule of the constitution or in any other language as the Central Government by notification
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in the official gazette specifies for the promotional need of the language.Section 80QQB, highlights the deductions to be made in respect of royalty income of authors of certain books other than textbooks.
Section 88 RRB deals with the deductions on payment of royalties for patents. In some cases, the total income earned by an individual on a patent can be divided into royalty and additional income classified not under royalty. In all cases, the income received as royalty alone is eligible for tax deduction; it states that when income is received as a royalty, the whole income or Rs. 3 lakhs (whichever is lesser) shall be deducted.
When a compulsory license is being granted in respect of any patent, the terms and conditions of the license agreement shall decide the status of the income by way of royalty. For the purpose of allowing deduction under this section which shall not exceed the amount of royalty.
Deductions under Section 80 RRB can be claimed only upon satisfaction of a few basic criteria by the inventor:
o The individual claiming a deduction should be an Indian resident.
o Only patentees can claim this tax deduction.
o Individuals who do not hold the original pat-ent are not eligible for tax benefits.
o The patent under Section RRB in question should be registered under the Patent Act of 1970, either on or after April 1, 2003.
Patent Box Regime4: Section 115BBF provides concessional rate of taxation at 10% on royalty income in respect of exploitation of patents granted under Patents Act, 1970, and is only applicable to Indian resident who is a patentee (eligible taxpayer). The total income of eligible taxpayer must include income by way of royalty in respect of patent developed and registered in India and atleast 75% of the expenditure is incurred in India by eligible taxpayer for invention No other expenditure is allowed under the tax provisions if concessional tax rate under Section 115BBF is availed.
The eligible taxpayer has an option to avail the benefit of Section 115BBF in any year but he is required to continue to avail the benefit for next 5 years because in case option is not exercised in any of such 5 consecutive years, he shall not be eligible to take the benefit under the section for the next 5 years following such year in which option is not exercised.5
With this tax structure we are very much sure that keeping an IPR as an asset will be a good deal for the companies. The government is giving huge tax benefits along with redemptions in the official fees to boost up the IP culture in the country.
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4 https://cleartax.in/s/patent-tax-treatment5 Tax on Income from Patents – Patent Box Regime, https://cleartax.in/s/
patent-tax-treatment#choose (accessed on 12th June’19)
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CONSEQUENCES OF MISSING THE DEADLINE FOR FILING PCT
Tushar Kohli1To claim the priority of an earliest application, an international application must always be filed within 12 months from the filing date of the earlier application; failing to do so, the right of priority is lost. However, a remedy is provided wherein the international application can be filed within two months from the date on which the 12-month priority period expires. The priority claim in this special case will not be considered void for the purposes of the international phase, and all time limits during the international phase will still be calculated from the earliest priority date, even where no action is taken to restore the right of priority (see PCT Rule 26bis.2(c)(iii)).
If the international application is filed after 12 months from the priority date but within the 2 months from the expiration of the time limit, the applicant still can restore the priority of the earlier application. However, the restoration process of the right of priority is a fairly complex procedure, and several requirements must be taken care of.
The request for restoration must be filed along with the fees to the receiving office within the time limit of two months from the expiration of the priority period, and must be supplemented by a statement explaining the reasons for the failure to file the international application within the priority period; in some cases, a declaration or other evidence in support of the statement of reasons should also be submitted (PCT Rule 26bis.3(f)).
1 https://www.wipo.int/pct/en/newslett/practical_advice/pa_092011.html
2Under Rule 26bis.3(f), the receiving office requires the applicant to submit a declaration or other evidence in support of the statement of reasons or, if some evidence has already been provided, to submit additional evidence within a reasonable time limit (items 3 and 4 of Form PCT/RO/158). While for the “unintentionality” criterion, a statement indicating that the failure to comply with the priority period was not deliberate may be sufficient, the receiving office may, nevertheless, require that this statement be submitted in the form of a declaration, and may require that the statement provides the reasons for the failure, supported by evidence if necessary. For the “due care” criterion, the receiving office may require that the statement of reasons is substantiated with a declaration or other evidence.
3Further, according to Rule 26bis.3(a)(ii), the receiving office shall restore the right of priority if it finds that the failure to file the international application within the priority period was “unintentional”. The applicant can satisfy this criterion by demonstrating that the delay in filing the international application within the priority period was not deliberate and there is a continuing underlying intention to file the international application within the priority period. The receiving office should focus on the applicant’s intent at the time when the priority period expired, irrespective of any changes in the applicant’s intent before or after the expiration of the priority period.
2 https://www.wipo.int/pct/en/texts/ro/ro166a_166t.html3 https://www.wipo.int/pct/en/texts/ro/ro166a_166t.html
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Conclusion
It is always advisable to file the international application well before the end of the 12 month priority period and the applicant should not be dependent on the fact that priority claims of international applications filed within two months of the 12 month priority period can be restored as it is a relatively complicated procedure for requesting for restoration of priority date.
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PATENT VS RESEARCH PAPER PUBLICATION Shilpi Kumari
Securing a patent bars others from making, using, or selling your intellectual property without your consent. Patents can be awarded to a process, an apparatus, a new use of an existing material, or an improvement on an existing technology, as long as it can be demonstrated to be new, useful, and not obvious to the person skilled in the field as per the Indian Patent law.However, filing a patent can be a complex legal process. The Indian Patent Office, along with the patent attorney and agents, can help you navigate the legal requirements to determine whether your invention is patentable. After filing a patent application, it can take a significant amount of time for the patent to be granted or denied by the Indian Patent Office.Most of the theoretical models of Research and Development (R&D) assume that the successful innovator will patent their invention but in practice this is not the case. Researchers/innovators often find it preferable to publish their inventions or the research paper and exclude the possibility of patenting even without actually going to the effort of obtaining a patent.
Public disclosure
Publishing the research or publicly disclosing it before filing a patent application can severely limit its patentability and can completely bar the invention from receiving an Indian or foreign patent.However, seeking a patent first does not preclude publication of research results, and, in most cases to retain the potential for foreign patents, an Indian patent application must be filed before any description of the invention is published in an article,
abstract, thesis, presentation, or other public format to refrain it from going “in the public domain”.
Why researchers prefer Publication over Patent?
There are several reasons due to which Indian researchers prefer article publication over patent. One can be a lack of awareness about the procedure of patent. Generally, publishing a research paper is more emphasized in most Indian universities and research institutes as research publication gives more visibility to the researcher among academic fraternity. The patent on the other hand is a time consuming process as compared to the publication.
In India the patent right is not a big enough carrot to lure the researcher into filing a pat-ent application. The reasons maybe that the research subject has no commercial value, maybe the cost to commercialize the tech-nology is too big a hurdle for the researcher to scale or maybe the Patents Act in India provides too little protection for patents.
The economic costs (legal fees, etc.) of going through the act of obtaining a patent may, for small innovations, exceed the actual benefits of getting a patent.
The university or research institution where the researchers work do not have licensing department or IP cell to recoup the value of IP rights for the new inventions or the research work. A researcher needs profes-sional help when deciding whether to file a patent application for his/her new discover-
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ies. And, even if the researcher is awarded a patent, he/she may have trouble selling the patent right.
Since, no extra bonus is provided for a pat-ent application when compared to a paper, most researchers would choose publishing a paper. Writing a patent is different from writ-ing a paper, also paper is relatively quicker to publish and easier to write (no claims at all).
However, a patent followed by a good publication is not a bad idea wherever it is applicable, as you may get royalty for your work if there are people ready to use it in future and peer recognition is an added benefit.But the most important thing is, before starting your research you should decide first whether you look for good publication or patent because both things are different. For procuring a good publication the researcher requires a good theoretical concept but, for a patent the researcher needs to show novelty, inventive step and utility too. For patent you also need to find out current public demand along with its IP valuation.
Conclusion
There is a need to increase the awareness regarding the importance of patents and the knowledge regarding the filling of patent application. Patent is much more valuable for a researcher and it is a well-established fact, but Indian researchers seem to not value it much at present. Japanese articles and research papers are often accompanied with a pre-filed patent application.
Although publication has certain advantages, but the patent can be more useful as Patent = good publication + IP. Patent gives an authority to sell the product whereas paper gives an idea of the work to others to do further research. A good patented product can be commercialized and gives value over and above a paper. Research paper is a discussion over your work done. However, patent is the first step towards commercialized production of work. Patent, therefore, has more worth than Publication.
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BIODIVERSITY RELATED PATENTS: INDIAN SCENARIO Saipriya Balasubramanian
Introduction
The aim of India’s Biodiversity Act 2002 (herein referred to as ‘the BD Act’) is to conserve the rich biodiversity of the country. The act was implemented in 2003 under the auspices of the National Biodiversity Authority (NBA). As per the BD Act, NBA is responsible for access and benefit sharing (ABS), approval for access to and transfer of biological resources, results or technology of scientific research to foreign citizens, companies or non-resident Indians and several other matters related to conservation of India’s biodiversity. The Act insists upon appropriate benefit sharing under mutually agreed terms related to access and transfer of biological resources or knowledge occurring in or obtained from India for various purposes.
The BD Act and What it says
Section 6 (1) of the Biological Diversity Act, 20021
“No person shall apply for any intellectual property right, by whatever name called, in or outside India for any invention based on any research or information on a biological resource obtained from India without obtaining the previous approval of National Biodiversity Authority before making such application; provided that, if a person applies for a patent, permission of the National Biodiversity Authority may be obtained after the acceptance of the patent but before the sealing of the patent1 by the patent authority concerned; provided further that the National Biodiversity Authority shall dispose of the application for permission made to it within a period of ninety days from the date of receipt thereof.”1 https://indiankanoon.org/doc/1758638/
Biodiversity related provisions from The Indian Patents Act 1970 and Rules 2003:
According to Section 10 (4) (d) (ii)2 of the Patents Act, 1970, the patent applicant should disclose the source and geographical origin of the biological material when used in an invention. Such a disclosure can be included in the beginning of the specification.
Form 1 Declaration Requirement
The Indian Patent Rules 2003, in order to complement with the BD Act 2002, requires the applicant of a patent to submit a declaration under Form-1 titled Application for Grant of Patent of the Patent Rules 2003 to the effect that “the invention as disclosed in the specification, uses the biological material from India and the necessary permission from the Competent Authority shall be submitted by me/us before the grant of patent to me/us”.
NBA may, while granting approval, impose benefit sharing fee or royalty for commercialization of any rights arising out of the biological resources obtained from India.
Therefore, the guidelines make it mandatory for the applicant to obtain permission from NBA for a patent to be granted. Hence, a controller can raise an objection in the examination report if the permission from NBA is not obtained/ submitted. Even if the objection was not raised during the examination stage, the same could be raised in a later stage.
In case the patent application mentions a biological resource which is not originated in India, then an
2 https://indiankanoon.org/doc/43850560/
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approval from NBA is not required. In such cases, even if an objection is raised during examination, the applicant can overcome the same by stating that the biological resource mentioned in the invention is not of Indian origin and shall submit a declaration as well supporting the same. It is to be noted that in such cases the specification of the patent application should be amended by way of incorporation of a separate heading/paragraph at the beginning of the description that the biological material used in the invention is not from India and should clearly specify the source country and geographical origin of the same.
Penalties for Contravention of the BD Act
Under Section 55(1) of the BD Act 20023, “whoever contravenes or attempts to contravene or abets the contravention of the provisions of the section 3 or section 4 or section 6 shall be punishable with imprisonment for a term which may extend to five years, or with fine which may extend to ten lakh rupees and where the damage caused exceeds ten lakh rupees such fine may commensurate with the damage caused, or with both.”
Consequences of Contravention of Biodiversity Provisions under Indian Patents Act 1970
Contravention of provisions related to biodiversity provisions under Indian Patents Act 1970, shall lead to refusal of patent under Section 15. In case of pre-grant opposition under clauses (d), (f) and (k) of section 25(1) and in case of post-grant opposition granted patents shall still be revoked under clauses (d), (f) and (k) of section 25(2) of the Patents Act 1970.
3 https://indiankanoon.org/doc/111079/
If the complete specification does not disclose or wrongly mentions the source and geographical origin of biological material used for the invention, then as per clause (j) of Sections 25(1) and 25(2) respectively of the Patents Act, 1970, such scenario forms a ground for both pre-grant and post-grant opposition, respectively.
Post-Grant Opposition of NBA Vs Sunev Pharma Solutions Ltd4
On August 27, 2019, the secretary of NBA, filed post-grant opposition against Sunev Pharma Solutions for having obtained patent on invention bio-resources viz. Azadirachta indica, Berberis aristata or Berberis vulgaris, Glycyrrhiza glabra, Jasminum officinale, Picrorhiza kurroa, Pongamia pinnata, Rubia cordiflia, Saussurea lappa, Terminalia chebula, Capsicum abbreviata, Nymphea lotus, Curcuma longa; Tricosanthes diocia, Symplocos racemose, Ichnocarpus frutescens, Sesamum indicum oil, Ricinus communis oil, Cocos nucifera oil, Brassica juncea oil.
Violation of Section 6 of the BD Act 2002
“On scrutiny it was identified by NBA that patents for the same invention were granted in places like Europe, South Africa, United States of America, South Korea, and Mexico without prior approval of the NBA. Subsequently a patent was granted by the Indian Patent Office on October 10, 2018, with the patent number 302105. The objection was raised in the FER regarding the submission of approval from NBA, for which the applicant on October 10, 2015 replied that they have applied for NBA approval. Subsequently the applicant amended their reply on January 14, 2018, stating that all the biological resources were imported from China except
4 http://ipindiaservices.gov.in/PatentSearch/PatentSearch/ViewPDF
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Sesamum indicum oil, Ricinus communis oil, Cocos nucifera oil, Brassica juncea oil which were sourced from India and are exempted from permission of NBA as they are notified as Normally Traded Commodities in the NBA notification dated April 07, 2016. Based on the information provided by the applicant, patent was granted on October 10, 2018 with the patent number 302105.”
The above stated case is a classic example of wrongful disclosure of the geographical source and origin of biological resource. It will be interesting to the see the move of the Indian Patent Office in this case as it has further clearly stated that any false declaration on behalf of the applicant makes him liable for revocation of patent under section 64 (1) (j)/ 64(1) (p) of the Patents Act 1970 (as amended).
Inventions that do not relate to ‘Biological Resource’ defined under the BD Act, 2002
In view of the recent submissions made by the stakeholders with regards to the IPO decisions for the patent applications involving the use of biological materials not sourced/originated in India as well as the inventions that relate to material that does not come under the definition of ‘Biological Resources’ under the BD Act, 2002, the IPO has issued guidelines which have streamlined the following:
Value Added Product
Section 2 of Biological Diversity Act 2002 explicitly excludes value added products from the purview of “Biological resources”. Section 2 (p) - “value added products” means products which may contain portions or extracts of plants and animals in unrecognizable and physically inseparable form.
For example, if an invention is based on Tulsi plant itself, the patent applicant would require approval from NBA; whereas if an invention is based on the extract obtained from Tulsi plant, then no approval from NBA is required.
Bio-wastes
Bio-wastes are usually generated after the economic use of the biological resource is exhausted. In case of inventions that utilize bio-wastes no approval from NBA is required.
Synthetically prepared biological material
NBA approval is not required for inventions which are based on synthetically prepared material like enzymes, pigments, gums, sucrose etc., which may be produced from a biological resource.
Conclusion
Form the above, it is obvious that for inventions using ‘biological resource’ of Indian origin, it is mandatory to obtain timely approvals under the BD Act, 2002, while prosecution of patent applications in order to ensure a hassle-free patent grant process.
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S&A IP-Tech
Volume IV, Issue III
INTELLECTUAL PROPERTY AND TECHNOLOGY LAW UPDATES
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