Counterclaim v. Revocation – II (Scope of Counterclaim for revocation: Can it travel beyond the scope of alleged infringement?)

Taking the discussion further from my earlier post on the issue 1 [“Can a counterclaim for revocation in a suit of infringement before High Court be allowed to proceed hand-in-hand with a revocation proceeding before the IPAB involving the same patent and same parties?” ], I now take up the Issue 2, as mentioned in the said post, viz. Whether the scope of a counterclaim for revocation (against a suit for infringement) can travel beyond the scope of the said infringement suit? In other words, whether a defendant in its counter-claim for revocation can go on to challenge the validity of even those claims which are not alleged to be infringed by the defendant in the infringement suit filed by petitioner?

Although this is a sequel to my earlier post and whatever discussed therein is obviously a prerequisite to understand the connected issue of this post, I would still like to emphasize upon one of the findings (of my earlier post) that it is a ‘claim’ (or a set thereof) which should be dealt as a unit for the purposes of infringement and revocation proceedings and not the entire ‘patent’ always even though the relevant provisions in the Act or Rules may loosely refer otherwise [for e.g. the preamble to section 64(1) etc.]. I believe this holds the key to reach a logical conclusion for both the issues within the realm of the statute. 

In a case where a suit of infringement of a patent is filed by Petitioner against Defendant, section 107 provides that the defendant shall have, in its defence, all the grounds (of revocation of patent) enlisted in section 64 of the Patents Act. It need not be mentioned that these are not the only grounds available for defence in a suit for infringement, and it is possible for the defendant to simply assert non-infringement on merits without taking resort to the counterclaims of revocation viz. it may simply acknowledge the validity and enforceability of the patent while maintaining its stand that its actions are beyond the scope of the patent and are thus not infringing the patent. In such cases, the court is required to first determine the SCOPE of the patent claim (rather than its VALIDITY) - which is quite similar to the so called Markman’s Hearings in US involving interpretation of claims followed by infringement analysis. Thus, the Defendant is free to not to invoke its powers to challenge the validity of the claims. 

The alternative aggressive approach, which is presumably in fashion today, is to challenge the validity of patent itself in the suit of infringement on any of the grounds of revocation as available under section 64(1). A counter-claim for revocation is actually a fresh suit in itself and is by default clubbed by the Court with the suit of infringement. The critical questions which arises here is – the suit for revocation of what? Revocation of the entire patent including all claims therein? Or revocation of only those claims which have been alleged to be infringed by the defendant?

We shall hypothesize two situations in order to cover the possibilities. In case 1, lets presume that the person who is alleged to be infringing the patent doesn’t qualify the criteria of ‘person interested’, which although seems to be unlikely (considering that the person is purported to be an infringer), but may theoretically be possible in cases of contributory infringement or when the defendant is not the actual manufacturer of the product but only a merchandiser, importer etc. In such case where the alleged infringer is not a person interested, it, ipso facto, doesn’t have any right under the Patents Act to initiate any proceedings for revoking or invalidating or challenging a patent or a claim thereof (technically after the date of grant of patent) before any judicial or quasi-judicial forum. It is because of the fact that once a patent is granted, it can be subject to challenge (by a third party, other than the government) only through the post –grant opposition [under section 25(2) before the Controller] or through the revocation [under section 64(1) before IPAB], and in both cases the statute sets a pre-requisite of ‘person interested’ to initiate the proceedings. In case, however, a suit of infringement is filed against such person (who is not a person interested and doesn’t have the rights to challenge the patent otherwise), said rights (for challenging the patent) automatically deemed to stand vested in that person by virtue of section 107(1) of the Patents Act, 1970 immediately upon filing of such suit of infringement. Section 107 is reproduced herein below:

107. Defences, etc. in suits for infringement

(1) In any suit for infringement of a patent, every ground on which it may be revoked

under section 64 shall be available as a ground for defence.

(2) In any suit for infringement of a patent by the making, using or importation of any machine, apparatus or other article or by the using of any process or by the importation, use or distribution of any medicine or drug, it shall be a ground for defence that such making, using, importation or distribution is in accordance with any one or more of the conditions specified in section 47.

It must be appreciated that these rights are triggered only when the infringement has been alleged by the Patentee and are provided as a mere tool to the defendant to defend itself against such allegation. This conferment of rights does make a lot of sense as it tends to provide equal opportunities for both the parties. Following the principles of equity, however, the scope of these special rights so conferred in such situation must correspond, evenly, to the scope of alleged infringement only viz. the defendant should be allowed to challenge the validity of only those claims against which the infringement has been alleged and not any other claim (of the same patent) for the same reasons he was not entitled to challenge them before the institution of the suit of infringement. Thus if the petitioner has contended the infringement of only claims 1-10 (of total 30 claims in the patent), then the defendant in such case attains the equitable and statutory rights to challenge the validity of only those allegedly infringing claims viz. claims 1-10 and the defendant is still deficient of the rights to challenge the validity of the rest of the claims viz. claims 11-30. This seems to be in-line with my earlier contention that it is the ‘claim’ (or a set thereof) which constitutes a unit for the purpose of infringement and revocation proceedings and not always the entire patent (all the claims). It is also possible in such situation that the defendant challenges the validity of some of the allegedly infringing claims while only defends otherwise in respect of the rest of the allegedly infringing claims. In other words, the scope of the Defendant’s rights to challenge the validity shall not exceed the scope of alleged infringement, although the Defendant is at liberty to not to exercise it or to exercise it partially or fully. The benchmark is – the defendant, at the most, can challenge the validity of only those claims which are alleged to be infringed. Although this limited scope of challenge may appear to contradict the reference of the word ‘patent’ in section 107(1), but it seems justified for the same reasons that the preamble to section 64(1) also refers to the word ‘patent’ only (and as discussed earlier that the grounds make specific reference to claims etc.). As also discussed in my earlier post, the reference of ‘patent’ in the relevant sections need not be taken strictly to refer to the entire patent (viz. all claims) and should, at times, as and when applicable, be inferred as a subset of claims of the patent.

Proceeding to the case 2, where the person who is alleged to be infringing the patent is actually a ‘person interested’ within the meaning of the Act. In such case, the reasoning tendered above shall apply to the extent of procedural aspects of the rights. As per the statute, a ‘person interested’ is entitled, even without the institution of a suit of infringement against it, to challenge the validity of a patent (meaning thereby even a subset of claims of the patent and not necessarily the entire set of claims always) either by means of post-grant opposition [under section 25(2), before the Controller within 1 year of the date of publication of grant of patent] or by means of initiating revocation proceedings [under section 64, before the IPAB at any time after the grant of patent]. Thus, the institution of a suit of infringement against such interested person doesn’t seem to be actually conferring upon the alleged infringer any additional rights. This is true, however, only to the extent that there is no new right, in terms of the nature of rights, which has been created towards challenging the validity of the patent, but the difference in the procedural context is still maintainable viz. the forum before which such right could be evoked and ultimately adjudicated. In other words, the defendant in such case shall be entitled to challenge in its counterclaim before the High Court the validity of only those claims against which the infringement has been contended by the petitioner, and if the defendant is desirous of challenging the validity of claims other than those alleged to be infringed, than it has to take recourse to the corresponding statutory rights by filing a fresh proceeding under post-grant opposition before the Controller or a revocation before the IPAB, as the case may be. Such challenge to the validity of claims falling outside the scope of infringement shall not or should not be accepted as part of the Counter-claim before the High Court. Thus, in this case, its is the right to challenge the validity of patent in a counter-claim before the High Court which is exclusively triggered and conferred upon the defendant upon filing of a suit of infringement, which right (to challenge the validity of patent) otherwise allows the defendant only to raise it before the Controller or the IPAB. This is also in-line with finding in the earlier post that the proceedings for revocation before IPAB and counter-claim before the High Court could be maintainable and adjudicated simultaneously provided that the subject matter of the challenge differs viz. even though it involves the same patent, then either the set of claims which are subject to challenge are different or the grounds of challenge (of the same set of claims) are different or even when the grounds and claims are same, the facts relied upon to challenge the validity of claims are different (for example reliance upon different citations for challenging the novelty of the invention etc.). I am afraid that this would somehow also require a stricter interpretation of section 104 wherein it is provided that if the counterclaim of revocation is filed in a suit of infringement before a district court, the matter shall automatically stands transferred to the High Court. In such matters, I believe, that the district court must determine the scope of such revocation first – if it falls within the scope of such infringing claims, then the matter as prescribed should be transferred to the High Court. In case, however, the Defendant has attempted to challenge more than what is allowed (viz. outside the scope of infringement), then the District Court should outright reject the counter-claim to the extent that it is exceeding the determined scope (of infringement) because for that the claim is not maintainable before district court (which is not the appropriate forum) and should have been filed before Controller or the IPAB, as the case may be.

On a concluding note, I believe that the scope of counterclaim for revocation cannot exceed the scope of the alleged infringement in terms of the claims.

Any suggestions, inputs and comments are most welcome!

Examination and its commencement under the Patents Act: A conflict within the law

While discussing this issue with one of my close friend, I realize that there seems to be a clear conflict on this point among the Patents Act, 1970 and the Patents Rules, 2003.

From the general perception under the Patents Act, let’s assume for the time being that the term ‘Examination’ here refers to the formal examination of the patent application for the purpose of identifying the patentability of the alleged invention encompassed therein (although the term ‘Examination’ may bear a wider perspective then aforesaid and deserve a broader interpretation with consequences on the commencement thereto, the possibilities of which I shall discuss in the latter part of this post).

The formal examination of the application is considered to commence when the Controller actually refers the application and specification and other documents to the Examiner for preparing a report on patentability. All further steps are irrelevant for the present discussion and are thus avoided here. Of course such reference by the Controller of the application to the Examiner takes place only if the applicant has filed a request for examination (RFE). However, there is a prevalent conception that the examination does not or cannot commence also unless the application has been published viz. the actual examination can commences only if the request for examination has been filed as well as the application has already been published (of course we are not taking into account here that the applications are taken up for examination in the sequential order of the filing of the request for examination, which is quite well settled). This conception is in fact even rightly supported by Rule 24B (2)(i), as reproduced below: 

“The period within which the Controller shall refer the application and specification

and other documents to the examiner in respect of the applications where the request

for examination has been received shall ordinarily be one month from the date of its

publication or one month from the date of the request for examination whichever is

later.” (emphasis provided)

I do understand that this discussion is purely academic as this issue may sound extremely redundant and impractical from the view of as things currently stand at the patent office. This is because the currently pending backlog at the patent office doesn’t allow any application to be taken up for examination before about 4-5 years and by then in all possibilities the application would have been published (either under requested or by default after 18 months). For this problem, lets hypothesize a situation where the patent office has zero backlog and the turnaround time has reduced to 1 day with prompt action by Controllers and Examiners (I wish I see this happening in my lifetime!). In such a scenario, if a standard patent application (not PCT or Convention application, just to avoid any complexities) with complete specification is filed at the Patent Office on January 1, 2012 along with the request for examination, then the Controller shall, according to Rule 24B(2)(i) shall still have to wait for the application to be published (which is June 30, 2013, unless published early on request) in order to commence the examination viz. to refer the application to an Examiner.

Now let’s see what the relevant section has to say in this context. The section 12 of the Patents Act is reproduced below:

     

“12.  Examination of application

   (1)  When a request for examination has been made in respect of an application for a

patent in the prescribed manner under sub-section (1) or sub-section (3) of section 11B, the application and specification and other documents related thereto shall be referred at the earliest by the Controller to an examiner for making a report to him in respect of the following matters, namely,—

(a)    whether the application and the specification and other documents relating thereto are in accordance with the requirements of this Act and of any rules made thereunder;

(b)   whether there is any lawful ground of objection to the grant of the patent under this Act in pursuance of the application;

(c)    the result of investigations made under section 13; and

(d)   any other matter which may be prescribed.

(2)  The examiner to whom the application and the specification and other documents

relating thereto are referred  under sub-section (1) shall ordinarily make  the report to the Controller within such period as may be prescribed.” (emphasis provided)

Thus the statute, on the contrary provides that when a request for examination has been filed, the Controller shall, AT THE EARLIEST, refer the application with specification and other documents to the Examiner viz. commences the Examination. There is no reference of subjectivity to the publication of the application here. More interestingly, while this section 12 was amended in 2005 to insert, as one of the other amendments, the phrase “at the earliest”, the conflicting provision under Rule 24B(2)(i) came into effect under Patent (Amendment) Rules 2006 only viz. within a short span of about 1 year only.

This appears to be a clear conflict in law. There could have been a scope of harmonious interpretation of the statute in case the Act has merely mentioned something to the effect that upon filing the request for examination the Controller shall refer the application to the Examiner and one could in that case say that the Rule just adding another requirement (of publication) to be checked by the Controller before he actually refers the file to the Examiner after the filing of the RFE. Unfortunately, that is not the case since the Act specifically added the phrase “at the earliest”, which doesn’t leave any scope of the dependency upon publication (which is not even mentioned in the section) in order to commence the examination. Thus, going by the general rules of interpretation of statute, the Act trumps the Rules and in case of clear conflict the Act prevails. In this case, accordingly, section 12 shall prevail against the Rule 24B to the extent of conflict.       

Regardless of what has been discussed above, one could also take a view that the term ‘Examination’ is quite broad even in the context of its usage in the Act/Rules, wherein a general meaning of the term ‘Examination’ could be inferred from the prescriptions under section 12 (1) (a) to (d), in which (a) states “whether the application and the specification and other documents relating thereto are in accordance with the requirements of this Act and of any rules made thereunder”. In such case, isn’t the Controller under an obligation to scrutinize every patent application soon after its filing at least from the perspective of its subject matter to determine whether the application is related to a defence related invention and if it is so then to raise an objection within 6 weeks of the filing (because after 6 weeks, under section 39 of the Act, the Controller loses control over the Applicant in respect o filing corresponding patent applications in other countries). Is it not a check of the application is within the requirements of the Act viz. a part of the Examination, which effectually is deemed to have begun even before the filing of the RFE.  I am not sure if this scrutiny is or can be construed as part of the Examination. Certainly the exclusion of any prescribed manner of this scrutiny in the Act/Rules cannot be the reason. The reference of the application or for that reason any other matter by the Controller to the Examiner(s) is purely discretionary. Even in the seemingly mandatory provision under Section 12 and Rule 24 that the Controller “shall” refer the application to the examiner, the “shall” should be treated as “may” or it may be deleted altogether as a redundant provision. This is because the Controller is the point of authority under the Act and as per Section 73 of the Act, the Examiners “may” be hired by govt. to facilitate the Controller in discharging its functions under his authorization. The Controller is given enough wide powers to delegate the work or to retain it. It is understandable that the Rules have been made to regularize the procedure and make it more transparent, they should, at the same time, address all possible situations. In a hypothetical situation, assuming there are so few patent applications (say only 1 per month) are filed at the Patent Office so that the govt. need not hire the Examiners believing that only one individual person (viz. the Controller) could examine and handle it on its own. In such case, the rule and perhaps the section become redundant and infructuous to this extent.   

In respect of the publication, Examination and Grant of patent, I have always been of the view that the baseline is that the Patent should not be granted before the expiry of six months of the date of publication [under Rule 55(1A), in order to provide sufficient time for pre-grant opposition] irrespective of when, how and by whom the examination is commenced.

Any suggestions and inputs are welcome!

Indian Patent Agent Exam: Amendments and deteriorating standards

A Notification [No. S. O. 2296(E)] was published in the Gazette of India by Department of Industrial Policy and Promotion, Ministry of Commerce & Industry on September 26, 2012 and hosted at the Indian Patent Office website (at here) on November 7, 2012. This notification effectuates certain amendments to Rule 110 of the Patents Rules, 2003, which relates to the qualifying criteria for the examination of patents agents. In brief, this amendment while retaining the overall pass percentage to 60% of total (of all three exams) and maintaining the sectional cut-offs for the Exam I and II, it:

(a) reduced the maximum number of marks allotted to the viva voce from 100 to 50; and

(b) also did away with the requirement of sectional cut-off of 50% in respect of viva voce.

This means, that the total marks for the exam would now be 250 (instead of 300 earlier) viz. 100 each for paper I and II and 50 for viva voce, and one will have to score a total of 150 marks (viz. 60% of total) without any relevance of the score in viva voce (whereas the person will still have to score at least 50% in Exams I and II independently).

In nutshell, the significance of the viva voce has been greatly undermined in the qualification procedure and in fact one is given an option to qualify the exam without even appearing in the viva voce. This is sort of an unfortunate but expected move from the ministry after the judgment dated February 28, 2012 of Delhi High Court in the case of Ms Anvita Singh v. Union of India and Anr. I have not been able to digest the rationale behind the judgment in that case, wherein petitioner was found aggrieved because she could not clear the sectional-cut-off for the viva voce and she claimed herself to be in practice and diligent upon the subject. Woefully, the court relied upon her performance in previous exams and her graduation also. Going by such standards for changing the course of a qualifying examination, then every year thousands of students who fail to make it due to marginal sectional cut-offs in different exams, perhaps including civil service exams, and who are among the toppers in their graduation courses, must also challenge the examination procedure as flawed because they were good enough (by general performance) to clear the cut-offs.

The inclusion of viva voce in the qualifying exam is actually the demand of the practice and is in line with what is expected from patent practitioners.  The articulation skills and verbal proficiency are indispensable for patent practitioner or perhaps any practitioner practicing any field of law.

I am a firm supporter of bringing in new and innovative changes in the qualifying procedures and criterion in order to keep pace with the changing requirement of society and industry so as to make the whole system dynamic. But in this case not only the reasons for invoking such changes are absolutely unacceptable and baseless, the changes themselves are shortsighted and compromising. Where the standards for qualification should be scaled up (with an equivalent support in training and educational programs for aspirants so that more and more students qualify tougher and tougher exams), we are viewing a downgrade in the entire system. It seems like a village school, where the students who could not clear the exams went on to the headmaster to complain that the examination system is flawed and the students should be allowed to bring in and use their help books.

Nevertheless, we can expect the exam notification very soon, followed by the exams, followed by a more skewed result list.