Disputes involving Intellectual Property Rights and Technology are notably characterized by technical issues and other complex matters concerning, for example, the validity of the trademarks, or of the designs, or of the patents involved.

Conflicts are also about the relationship between the parties, as it particularly is the case, for example, in matters involving franchising or agency agreements, distribution contracts and licenses.

In order to help parties in finding fast and efficient solution to IP disputes, WIPO and CAM signed a deal (effective from July 2020) to promote Mediation for IP and technology issues.

Mediation helps parties preventing and resolving disputes, enabling them to find amicable solutions, facilitated by a third neutral person, in a completely confidential setting. This facilitative proceeding is generally flexible, cost effective and time saving.

As a matter of fact, the experience so far made by those who have solved a conflict in mediation confirms that an early intervention, through the facilitating dialogue between the parties, effectively prevents the insurgency of disputes in Court or in arbitration and helps them finding better ways of renegotiating their agreements, while maintaining sound commercial relations.

In particular, mediation creates the best opportunity to reach a sustainable agreement which satisfies the needs and meets the interests of the participants.

In addition to that, mediators must also have the skills to manage the emotional climate of the mediation and to help parties understand each other’s point of view.

Mediation is particularly recommended, where:

• Both parties wish to preserve/create important business or other relationships with the other side (licensor/ licensee, franchisor-franchisee, supplier-distributor);
• The issues involved are sensitive and would require disclosing trade secrets, competitive information, or testimony of management;
• The defeat in litigation would be significantly harmful;
• One or both parties prefer to avoid the economic burden of the litigation;
• The parties would only be satisfied with a resolution that a court could not grant (for example, the modification of the other side’s trademark);
• As it often is the case, the dispute has an international ramification in different markets, and the required solution that provides has to prevent litigation in multiple jurisdictions.

Moreover, the possibility of appointing a mediator who is skilled in the matters at issue, enables the parties to cope with their problem, taking into account all the necessary aspects and predictable outcomes.

In light of the above, Mediation is particularly considered suitable and effective in Intellectual Property Rights and Technology matters.

As a matter of fact, also the Unified Patent Court comprises an Arbitration and Mediation Center.

In this regards, WIPO and CAM both have a well-established expertise in managing and resolving disputes through, in particular, Mediation (and in ADR of course).

The recently officially announced cooperation between WIPO and CAM is aimed to offer joint mediation services in international cases involving one Italian party.

In particular, the cooperation consists of:

• The possibility, for the parties, to choose a mediator from a Panel of WIPO-CAM skilled professionals, having experience in helping parties to resolve disputes relating to IP rights and technology;
• The creation of ad hoc model WIPO-CAM mediation clauses and submission agreements;
• Offer the case management of the proceedings under the WIPO Mediation rules
• The undertaking of WIPO and CAM to jointly promote mediation to resolve disputes involving Intellectual Property rights and technology.

In light of the hard times we are all going through, in which the players are requested to rapidly adjust to the new global conditions, on international markets, mediation seems to be the most suitable tool to enable us to handle with the so called “new normality”.

However, operation of these rules also hit by roadblock of series of petitions. Reacting to this grim situation a writ petition was filed in Mylan Laboratories v Union of India & Ors  before Delhi High Court to seek intervention of the court to invoke “doctrine of necessity” to allow disposal of urgent cases by Chairman and the only appointed Member(PVRT).

The non-functioning of IPAB also came under the scanner of the Delhi High Court in Merck Sharp And Dohme Corp. vs Union Of India  And Ors. on 27 February, 2020 where Justice Prathiba M. Singh observed that

5. The non-functioning of the IPAB is a serious cause for concern inasmuch as cases like the present which involve patent rights which have a fix term are being unduly delayed due to non-constitution of the Tribunal itself. This position has continued for the last several years and has repeatedly been the subject matter of various writ petitions filed before this Court.

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11. It is matter of record with that there are more than 4000 cases including 1600 patent cases, which are pending before the IPAB and hence non-assembling and non-availability of infrastructure to the IPAB has severely dented the disposals before the IPAB, and the delays have affected substantive rights of IP owners.

Resumption of hearing in IPAB

It took almost three months for the new Chairman IPAB to adjust to the Covid created crisis, which further dented the normal hearing in the Board. In order to resume hearings post Covid lockdown three office orders were passed by the Board in May 2020 to streamline future hearings and filings during the ongoing COVID-19 pandemic. These orders of the Board in fact led to normal resumption of work as the IPAB registry resumed receiving petitions on urgent matters through e-filing. Additionally, IPAB streamlined the process to be followed in cases of urgent mentioning and requests for adjournment, by sending email to the Deputy Registrar at ipab.tn@nic.in in advance.

Procedure for online hearing

Video conference platform established by IPAB would help to facilitate the disposal of urgent matters now. The petitioners/Litigants who are willing to joint video conference proceedings can now forward their requests to IPAB registry through email giving details such as their names, case title, case number, date of hearing along with their contact details well in advance of the hearing date. Registry would provide link and pin for joining the online hearing along with the time slot of the hearing to the petitioners /litigants by through email.

Recent decisions of IPAB

With appointment of all technical members, IPAB is now operational and moving full throttle in conducting hearing through video conference and disposing the urgent appeal matters. With IPAB resumption of functioning, we see now series landmark decisions on the appeal cases.

Looking beyond Computer program per se

In Ferid Allani v Union of India & Ors, IPAB looked beyond computer program per se and allowed patent on computer related invention based on the ground of having technical effect. This case would also be known for being rejected by Controller on multiple times even when High Court clearly interpreted computer program exceptions should be limited to mere programs alone. The IPAB ruling on patentability of computer-related inventions demonstrating “technical effect” or “technical contribution” would perhaps break the jinx of such rejections at IPO and would give much needed relief to inventors.

In an another interesting order (Novertis AG vs Natco Pharma Limited )[OA/20/2019/PT/DEL dated 29 September 2020] IPAB questioned the virus of the post grant opposition, where insufficient fee was paid and the Controller allowed the deficient fee to paid after the expiry of the prescribed period. IPAB Ruled that

23.2 The post-grant opposition was not maintainable ab initio for lack of filing proper prescribed fee. The Controller should not have acted upon the post -grant opposition as the proper fee …………... within the prescribed time period of filing the opposition. ……………………..How come an opponent having stature of legal entity, pay a fee applicable to natural person? The balance fee was remitted on 08/11/2017 after the statutory time period expired on 30/09/2017. Therefore, the post- grant opposition itself was not maintainable and the office of the Learned Controller is expected to exercise due diligence in future. On this ground, we hold that the order passed by Controller on 16/08/2019, being an order on non- existent post- grant opposition, does not have merit to stand.

This case would be also be known for restraining the Controller to resort to hindsight analysis in novelty rejections as IPAB held that

“But for the “hindsight analysis”, it was not possible to arrive near to the structure of the instant patent. The “hindsight analysis” is not allowable under “inventive step” determination let alone “novelty” consideration. “

The Board also questioned Controller refusal of the patent by ignoring the recommendations of the Opposition to the contrary, without giving any reasons. The Board ruled

23.6 The Learned Controller ought to have considered the view of the members of the opposition board who were of the opinion that “the present opposition may be dismissed and the current patent may be allowed to stand.”

IPAB quipped that the views of members of opposition board appears very crucial and

“If at all the Learned Controller was to differ from the opinion of the opposition Board, the point of disagreement should have been annotated in the order, which is not present in the order….”

In this case IPAB granted the patents after finding also that “the other grounds such as “lack of inventive step’, objection under section 3(d) and that related to “insufficiency of disclosures” were also decided without proper reasoning.”

This is a classic case of overall examination of evidence, application of hindsight and improper interpretation of the recommendation of crucial analysis of the opposition board. This decision would go a long way to guide the future oppositions proceeding before the Controller.

Violation of the procedural fairness

In another case (Hawar Technologies Limited Vs COP 9(OA/56/2020/PT/DEL dated   12^th September 2020 IPAB found clear violation of hearing principles as laid down in the patent act and rules .The board observed in relation to the violation of the hearing principle that

23. “it is clear that the Patent Acts and rules framed thereunder are code in itself and prescribes the contents of the natural justice and hearing principle. The natural justice in the context of the Patents Act is not merely confined to the hearing orally which according to us in the present case was mere formality and was not done a substantial hearing. But in fact the Patent Act and rules framed thereunder also provides for the provisions of the written submissions.

The Board heavy relied on ruling of landmark Dharampal Satyapal’s case relating procedural fairness, natural Justice and hearing principles to highlighted the importance of written submission and observed that

Rule 28(7) of the Patents Rules 2003 provides as follows: (7) In all cases of hearing, written submissions and the relevant documents, if any, shall be filed within fifteen days from the date of hearing.” Therefore, the contents of the natural justice or hearing principle in the context of the Patents Act is prescribed by the delegated legislation which are rules framed thereunder in the form of Rule 28 (7). In such kind of cases, as per Dharampal (supra), the instrument has to be followed and the same cannot be ignored. Therefore, no provisions of the Act or Rules should be rendered superfluous and the interpretation, which should make the provisions workable, should be followed.

This decision would go long way to earmark the guiding principle of hearing that must be followed by the Controllers while conducting hearing of contested cases. In this case Board ruled that

If the present case is tested on the touchstone of the principles culled out above from the Dharampal Satyapal’s case, it is clear that not merely there is a violation of the reasoned decision principle which is part of the procedural fairness, but in fact there is also violation of the hearing principle as well and thus there exists a complete violation of the procedural fairness in the present case.

This case would also be known for imputing the concept of expended version of natural justice in context of patent Act where Controller is dealing with technical matters, which involve application of scientific principles along with the legal principles.

According to the Board,

“ A brief hearing of hour or so may not suffice as the evaluation of the prior arts and understanding requires extensive readings, appreciations as well as the deduction so as to form an opinion on novelty and inventive step.”

Highlighting the value of the written submissions in patent cases Board observed that

“ the rules of procedural fairness including natural justice as per the Patents Act and Rules framed there under do not end with the hearing and in fact the natural justice continues until the filing of the written submissions  which is provided under the Rules dealing with the prior arts enabling the controller to have a reading, appreciation and apply the same.

Board’s finding on the violations of the procedural fairness in the present appeal lead to rule that

“the trigger for violation of the procedural fairness is both the unreasoned decision as well as the violation of the expanded hearing principle, the contents of which are prescribed under the Patent Rules in the form of Rule 28 (7) of the Patent Rules. Therefore, the said violations of the procedural fairness vitiate the impugned order warranting interference in an appeal applying the correction standard.

While remanding this case back to Controller the Board also accepted the request for change of controller, invoked 73(4) of the Patents Act, 1970, and directed that in the best interest of justice, the case may be referred to some other Controller.

Looking forward

The above proactive initiatives by IPAB for conducting hearing in urgent matters are welcome, as it would reduce the backlog of over 4000 cases that were pending for quite a long time. Appointment of new members, we can hope would hasten the disposal of revocation related matters as well. With finalisation of the Tribunal, Appellate Tribunal and other Authorities Rules (Qualifications, Experience and other Conditions of Service of Members), 2020 on 12.02.2020 by the Ministry of Finance, we can look forward for the IPAB to be functional uninterrupted now onwards. The timely intervention of Supreme Court brought the relief in terms of continuation of the appointed Chairman of IPAB first up to September 2020 and now up to December 2020. With operation of IPAB in full swing, we can expect more prudence in patent office decisions now.