In an order dated May 7, 2024, the Calcutta High Court delivered a significant verdict upholding the constitutionality of Section 53 of the Patents Act, 1970 (hereinafter referred to as “the Act”). The judgment reaffirmed the alignment of the Act with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), an international legal agreement between all the member nations of the World Trade Organization (WTO).
The Challenge
The petitioner challenged the vires of Section 53(1) of the Act, citing it to be inconsistent with Section 11-A(7) of the Act. Section 53(1) of the Act stipulates that the term of every patent is twenty years from the date of filing the application. Section 11-A(7), however, provides that a patent applicant shall have privileges and rights as if a patent for the invention had been granted on the date of publication from the date of publication of the application until the patent is granted, excluding the right to sue for infringement. The right to institute an infringement proceeding can be exercised only once the patent has been granted.
The petitioner argued that this creates an inconsistency within the Act. Specifically, while the patent term starts from the application date, full rights are only conferred upon grant, leaving a gap where only limited rights are available. It was contended that the twenty years’ tenure of a patent ought to commence from the date of its grant or at least its publication. It was the primary contention of the petitioner that such period is not counted within the term of the patent since the period between the application and the grant of the patent is not of any practical benefit to a Patentee insofar as the assertion of rights on the basis of the patent is concerned.
Findings of the Court
The Court observed that although these provisions might appear contradictory regarding the activation of rights, they do not actually conflict. This is because the legislative intent behind them is to encourage early disclosure of inventions and to comply with international standards, which require a fixed patent term beginning from the application filing date. Following are the key takeaways from the verdict-
- The Court observed that there lies no inherent contradiction between the two provisions. The Court reasoned that Section 53 and Section 11-A(7) serve different stages of the patent process and are not mutually exclusive. While Section 53 ensures a fixed patent term, promoting certainty and uniformity, Section 11-A(7) provides interim protection from the publication date to the grant date, safeguarding the applicant’s interests without prematurely granting full patent rights. The rights of a patentee under Section 48 of the Act are only crystallised on the date of grant of a patent from the date of the application for the term, and the patentee is entitled to seek all damages on account of infringements of its right from the date of publication of the patent application. Following are three stages of patents and the rights that are accorded to the patentee-
- From Application to Publication: During this initial stage, the applicant does not enjoy any enforceable rights. However, the date of application establishes the priority date for the patent.
- From Publication to Grant: Under Section 11-A(7), the applicant enjoys certain limited rights akin to those of a patentee, except the right to institute infringement proceedings. This period ensures that the applicant has some degree of protection and can mark their invention as “patent pending.”
- From Grant to Expiry: Full patent rights are conferred, allowing the patentee to enforce their patent and seek damages for infringements dating back to the application date.
The Court further observed that the amendment brought by the Patents (Amendment) Act 2002 is an improvement from the perspective of the patentee as the term of all types of patents has been uniformly extended to 20 years from the date of application in compliance with Article 33 of TRIPS.
- Article 33 of the TRIPS mandates a minimum patent term of 20 years from the filing date. The Court emphasised that Section 53 ensures India’s compliance with these international standards, underscoring India’s commitment to its treaty obligations. Starting the patent term from the grant date would deviate from international norms and create uncertainty.
- The judiciary typically avoids intervening in legislative matters unless there is clear evidence of arbitrariness or a violation of fundamental rights. The Court noted that the right in question is not a fundamental right protected by the Constitution but one granted by statute. The standard for challenging legislation is higher than for administrative actions, as there is a presumption of constitutionality for statutes. In this case, the Court deemed the legislative decision to begin the patent term from the filing date to be reasonable and balanced, showing careful consideration of various interests.
Decision and Implications
The Court decisively held that Section 53 of the Act is constitutional and rational, aligning with both domestic policy and international commitments. It clarified that the limited rights under Section 11-A(7) of the Act during the pre-grant period are intended to provide provisional protection without overstepping, ensuring a fair balance between protecting inventors and preventing stifling of competition.
This judgment reaffirms the stability and predictability of India’s patent law, which is crucial for both domestic and international stakeholders. It highlights India’s dedication to international harmonisation of patent laws, potentially encouraging foreign investment and technology transfer.
By upholding the constitutionality of Section 53 of the Act, the Court reaffirmed India’s commitment to its TRIPS obligations, ensuring that the country’s patent term starts from the filing date, thus providing a standardised 20-year protection period. The decision highlights the legislative intent to encourage early disclosure of inventions while safeguarding applicants’ interim rights without granting premature enforcement powers. This approach not only promotes innovation but also maintains a fair competitive landscape.
Future Considerations
While the Court upheld the existing framework, the petitioner’s arguments regarding limited pre-grant rights could prompt future legal challenges or legislative amendments to enhance these provisional rights. One potential area of reform could involve introducing patent term adjustment (PTA), similar to practices in the USA. PTA compensates patent holders for delays in the patent approval process, effectively extending the patent term to account for the time lost during administrative processing.
Implementing PTA in India could address concerns about the period between the filing and granting patents, ensuring that inventors do not lose effective patent terms due to bureaucratic delays. This adjustment could benefit domestic inventors and smaller entities, providing them a fair opportunity to fully capitalise on their inventions. By adopting such reforms, India could further bolster its patent regime, making it more equitable and encouraging innovation while maintaining compliance with international standards.
However, the debate around introducing reforms similar to patent term adjustment is not novel to the Indian patent regime. The Delhi High Court considered the same in the case of Nitto Denko Corp v. Union of India WP (C) No. 3742 of 2013. It concluded that any further extension beyond the already granted 20-year term would not be conducive to the Indian patent regime, which was considered to strike a perfect balance between promoting innovation and encouraging competition.
