Doctrine of Election: Is it applicable in Patents?

Is the 'Doctrine of Election' applicable in case of Patents? This is the bone of contention in one of the recent-most case of Dr. Aloys Wobben Vs. Shri Yogesh Mehra and Ors. [Decided on 06.12.2010] [complete judgment may be read here http://judg-mental.blogspot.com/2011/03/dr-aloys-wobben-vs-shri-yogesh-mehra.html].

Before moving onto the case and its analysis, I would like to discuss the basic tenets of the Doctrine of Election. For the applicability of the Doctrine of Election, there is a pre-requisite of the presence of three elements of election - existence of two or more remedies; inconsistencies between such remedies; and choice of one of them. All three elements are necessary and if any one of the three elements is not there, doctrine does not apply. And as per the doctrine – the petitioner can avail only one of the remedies available and not all of them simultaneously. The 'doctrine of election' is based on the rule of estoppels and thus bars a person from availing two or more remedies simultaneously.

In this case, the defendant sought for: (a) revocation/rectification of the plaintiff’s patent, in a proceeding before the Intellectual Property Appellate Board (IPAB), under provisions of Section 117G (basically a revocation petition under section 64 of Patents Act); and (b) cancellation of the said patent, as defence under Section 107 of the Act, before the Court, in the suit for infringement.

A revocation/rectification petition could be filed under section 64 of the Patents Act, 1970 before the IPAB. Section 117G is only with regard to the transfer of pending proceedings for revocation of patents from High Courts to the IPAB. Section 64 basically lists out 17 grounds (a-q) for revocation of patent. As per section 107, all these grounds are also available as a defence in a suit for infringement. In the present case, the plaintiff urged the court to stop the defendant from availing both the options simultaneously and relied on the doctrine of exercise.

The Hon’ble Court denied the plaintiff’s application and allowed the defendant to pursue both the remedies simultaneously. The reasoning given by the Hon’ble court is as:

“Though seemingly overlapping, the remedies may not be necessarily availed simultaneously. For instance, a post grant opposition applicant may not choose to carry the matter in appeal. A third party may be sued for infringement; either at that stage, or before, he may prefer an application before the Board for cancellation or revocation. In the event of his being sued for infringement, if his application before the Board is held to be not maintainable, or alternatively, he is asked not to raise the ground of cancellation in his written statement, his defence would be seriously prejudiced. In these circumstances, it would be contrary to statute to hold that he cannot pursue his independent statutory remedy; that would be plainly against public policy.” (emphasis provided)

The reasoning provided by the Hon’ble Court seems quite perfunctory to me. Let’s first discuss the applicability of the Doctrine of Exercise in the present case.

The remedy available in both the cases to the defendant is same (not because of the common grounds of section 64, but because of the common result) viz. the revocation/cancellation of the plaintiff’s patents. Secondly, it is quite possible that the IPAB and the High Court, while deciding upon the same issue parallely, may reach to different conclusions and issue conflicting orders (although in that case, the order of High Court shall prevail, but it will make the IPAB’s exercise perfectly futile), whereby one forum may revoke the patents and the other may upheld the validity of patents. Thirdly, in case a suit for infringement is pending against the defendant, it certainly has the choice to opt any of the options viz. to file a petition for revocation for patents at IPAB or to file a counterclaim for revocation in the suit. Thus, it seems that the doctrine should be applicable in the present case.

The Hon’ble Court erroneously construed it to interpret that availing of its rights before one forum will render the defendant devoid of its rights to be used before the other forum, which is certainly not the case. It is agreed that the right to file a counterclaim of revocation before High Court and right to file a petition for revocation before IPAB are statutory rights and cannot be taken away from the defendant, however, the Court could have suspended simply suspend one of the proceedings until the other one is pending, as otherwise it amounts to multiplicity of proceedings. Such an order will not take away the rights of the defendant, but will only suspend its exercising of those rights for the time being they are being pursued at a different forum. Apparently, unlike the Trade Marks Act 1999, there is no clear cut provision in the Patents Act, 1970, to this effect. Section 113 (2) of the Trade Marks Act, 1970 clearly provides that:

Where before the institution of a complaint of an offence referred to in sub-section (1), any application for the rectification of the register concerning the trade mark in question on the ground of invalidity of the registration thereof has already been properly made to and is pending before the tribunal, the court shall stay the further proceedings in the prosecution pending the disposal of the application aforesaid and shall determine the charge against the accused in conformity with the result of the application for rectification in so far as the complainant relies upon the registration of his mark. (emphasis provided)

Not only this, as per section 113(1) of the Trade Marks Act, 1999, the Court, if satisfied that such defence is prima facie tenable, provides 3 months time to accused to file a rectification before the Appellate Board.

Although, there are no corresponding provisions in the Patents Act, the Court can certainly decide to suspend one of the proceedings (where the rights and remedies are identical and the parties involved are also the same), in order to avoid a situation of possibly conflicting decisions. This could be further extended to a hypothetical situation, where within one year period of grant of patent, a person (interested) could file - a post-grant opposition under section 25(2) (to be decided by the Opposition Board); a petition for revocation of patent under section 64 (to be decided by the IPAB); and supposing a case of infringement has been filed by the Patentee against the person, he can also file a counterclaim of revocation under section 107 (based on any ground under section 64) (which matter than will be decided by the High Court). The grounds under section 25(2) and section 64 are almost similar with very minor changes.

Thus, in such situation, it is very much possible that the person is seeking same remedy viz. revocation of patents, effectively before three different forums, while relying on the same grounds. If allowed to proceed simultaneously, the outcome could be three different decisions by three different forums. The Hon’ble Court, therefore, ought to have suspended one of the proceeding, until pendency of the other.

Rules 137 and 138 of the Patents Rules, 2003

Lets begin from the end – literally - from the last couple of rules of the Patents Rules, 2003 viz. rule 137 and rule 138. The primary question here is "Whether a petition for condonation of delay in filing PCT national phase application in India maintainable or not?" The discussion, however, is not limited to this question only.

Although these two rules have been discussed, quite often, on some earlier occasions now, I would like to revive the discussion in light of the recent most decision of the Madras High Court in the case of Nokia Corporation, A corporation organized and existing under the Laws of Finland rep. by its Power Agent Col. J.K. Sharma Vs. Deputy Controller of Patents and Designs [Decided on January 24, 2011] [complete judgment may be read at http://judg-mental.blogspot.com/2011/03/nokia-corporation-corporation-organized.html]. For better understanding, before moving on to this decision of Hon’ble High Court, I would like to introduce you these two notorious provisions, which constitutes primarily the subject matter of this case. The rules are reproduced below:

137. Powers of Controller generally -

Any document for the amendment of which no special provision is made in the Act may be amended and any irregularity in procedure which in the opinion of the Controller may be obviated without detriment to the interests of any person, may be corrected if the Controller thinks fit and upon such terms as he may direct.

138. Power to extend time prescribed -
(1) Save as otherwise provided in the rules 24, sub-rule (4) of rule 55 and sub-rule (1A) of rule 80, the time prescribed by these rules for doing of any act or the taking of any proceeding thereunder may be extended by the Controller for a period of one month, if he thinks it fit to do so and upon such terms as he may direct.

(2) Any request for extension of time made under these rules shall be made before expiry of prescribed period. (emphasis provided)

I will come to the interpretation and emphasized portions of the Rules later while analysing the judgment.

In this case, Nokia first tried (unsuccessfully) to file a PCT National phase application at the Patent Office counter on 18.08.2009, while claiming priority from the US application 11/622, 147 dated 11.01.2007. As per Rule 20 (3) and Rule 20 (4) (i) of the Patents Rules, 2003 (hereinafter referred to as the Rules), the national phase application under PCT must be entered within 31 months from the priority date. In this case, the 31 months deadline expired on 11.08.2009. On scrutiny, the Patent Office returned the filing to applicant for non-compliance with filing deadline. Rule 22 of the Rules specifically provides that ‘An international application designating India shall be deemed to be withdrawn if the applicant does not comply with the requirements of Rule 20.’ (emphasis provided).

Upon this, the petitioner filed an application online and received an application number. [Although not relevant for the subject discussion here, but this exposes a major flaw in the existing system at IPO. Isn’t there any provision for basic scrutiny of applications filed online – may be some provisional number should be given unless scrutinized and accepted to provide a final application number. This is because an application number itself has some significance and entitles the applicant to claim to have a live application pending at the patent office (irrespective of the fact that it eventually, later in time, may be ordered as null ab initio)].

The petitioner also filed a petition for condonation of delay under Rule 137 and 138. The Deputy Controller rejected the application as not maintainable. The Hon’ble Court upheld the maintainability of the petition and remanded back the case to the Deputy Controller to be decided on merits.

I am not in full agreement with the arguments presented by the petitioner and the reasoning of the court in upholding the petition. This decision, to me, seems to be quite off the track and lacks any convincing reasons in support of the decision. I will take the issues here one by one:

Firstly, it was stated that Nokia filed a petition for condonation of delay under Rule 137 AND 138. I am not able to conceive of any circumstances under which a single petition would lie under r. 137 AND r. 138 both. These two are different provisions, dealing with different cases and providing different remedies. Rule 138 does NOT provide for ‘Condonation of Delay’. It is a provision for seeking ‘Extension of Time’ when applied before the expiry of the prescribed time. The difference between Condonation and Extension must be very clear here. As per Rule 138, the Controller is given power to EXTEND the time prescribed in the rules (except for exceptions of Rule 24B, sub-rule (4) of Rule 55 and sub-rule (1A) of rule 80) for a period of one month at the request of the applicant whereby such request is made before the expiry of the time prescribed in the rules. The request for extension must be made before expiry of time prescribed in the Rules and not before expiry of 1 month from the expiry of time. This is also evident from the fact that before the last amendment of 2005, the rule provided for making of request within extendable time. The before amendment rule is as:

Rule 138(2) : Any request for extension of time made under these rules shall be within the extendable period by request unless otherwise provided in these rules.(emphasis provided)

This was specifically amended to make it ‘before expiry of prescribed period’. It is like, the applicant must be able to foresee the delay and specifically request for an extension before the expiry. Once, the deadline expires, rule 138 becomes infructuous. One cannot make a petition under Rule 138 after the expiry of the deadline. This could be used in circumstances for example where the applicant is not able to submit the proof of right (under rule 10) or statement of undertaking (under rule 12) within 6 months and seek an extension of another one month, ofcourse with reasoning. A petition for condonation of delay viz. after expiry of the deadline, could be made only under rule 137 and NOT under rule 138. In the present case, where the petition was for condonation of delay only, the whole set of arguments and the reasoning given by the Hon’ble High Court with respect to rule 138 stands irrelevant and without any cause. The Court held that an application for extension could be made within extended one month, which interpretation is without any substantial reasons or justifications. An EXTENSION cannot be retrospective in nature. Such post-facto Extension would, by its nature, become a Condonation of delay and not an extension of time.

Secondly, on the issue of whether the petition under rule 137 and rule 138 (sic) is maintainable, court held that the petition is maintainable and should be disposed off on merits of the case. Rule 137 is a general provision which gives an option to the applicants to file a petition for condonation of delay once the delay has occurred and gives the Controller powers to condone such delay. Rule 20 and Rule 22 are specific provisions as per which the deadline to file strict and the consequence of non-compliance are provided. I believe that in case of such delay (non-compliance of Rule 20), the petition under Rule 137 is not maintainable for below reasons:

i. The deadline of Rule 20 viz. 31 months to file PCT national phase application is a mandatory provision, for which the consequence of non-compliance are that the application is “deemed to be withdrawn”. The term used here is ‘withdrawn’ which by itself means that the application is irretrievably expired. The term ‘withdrawn’, unlike ‘abandoned’, tends to reflect that it is done intentionally (with some positive act) by the applicant. The term has been used twice in the Patents Act and Rules. Once when the 48 months deadline to file the Request for Examination expires and second here when the 31 months deadline expires. In both cases, it is deemed that the applicant has WITHDRAWN the application. Thus, there is no scope for condonation of delay when the act itself is deemed intentional. Secondly, most other rules doesn’t provide for the consequences of non-compliance for all other deadlines prescribed therein. In such cases, where there is no specific rule, the general rule of condonation of delay is applicable and a petition for condonation of delay is maintainable under rule 137. As soon as the application is deemed ‘withdrawn’, it is ‘Dead’ in the eyes of law and the Controller doesn’t have powers to revive a dead application which does not exists in law. In support of this I would like to cite a very insightful judgment of Justice S Murlidhar in the case of Nippon Steel Corporation vs Union Of India, whereby in a similar case of deemed withdrawn application (due to expiry of 48 months deadline to file RFE), on a request for amendment of patent application by the petitioner, the L’d Judge said “request for amendment can be made only in relation to an application that exists in law” (emphasis provided).

ii. Secondly, without prejudice, rule 137 confers power to Controller to condone delay subject to that this irregularity could be obviated without detriment to the interests of any person. What is the test/criteria to determine whether such condonation would not be detrimental to the interests of any person. In a very highly competitive and transparent system, it is possible that the competitors are keeping a very close eye on the patent applications filed (and not filed) by a company and would like to exploit the non-filing of application from the very next day of expiry of the 31 months deadline. In such case, how the controller is supposed to check with every player in the market, as the delay here is not limited to one month and could be of one year.

On a more general note, it is a well settled principle of interpretation of statutes that specific terms of a statute override the general terms of the same statute. I would like to cite from the judgment of Fagu Ram Mahadeo Ram v. Pannalal [AIR 1962 Pat 272] whereby the Hon’ble court held that “It is one of the accepted canons of interpretation of statute that, if in the same field there is a special provision, which is applicable as also there is a general provision, the latter would give way to the former.”

I agree with the Court on rejecting the Controller’s reliance on rule 6(5) that the postal delay is the only case, where condonation of delay could be entertained and granted. This could be one of the case but not the only case where a petition for condonation of delay is maintainable. It is quite often that in case of patents and trademarks, we tend to give consideration to actual practice while interpreting the statute and tries to justify our interpretation with the existing practice being followed by the office. This is what the Deputy Controller actually tried to do in this case while standing by his orders of rejecting the application. I think his stand was correct but for wrong reasons. The practice cannot violate the written law; it can only stand where there is no specific written law on the issue or there lies some ambiguity in law to the extent that the practice is not in violation of the law.