Does A Patent Promote Innovation?

Introduction

Innovation is the birth of new ideas that improve the product in recognition. A Patent is a right granted to the inventor of a unique invention to protect his product and prevent it from being copied or sold for a while. The Indian Patent Act came into force in 1970. A Patent protects innovation. But does it promote innovation? Does “promoting innovation” mean marketing the said innovation? It helps in sharing knowledge and keeping up with the technology through patent rights and thus makes a person to know that such an innovation is already created and is protected. 

Patent Renewal, Restoration, and Duration

A Patent generally lasts for 20 years from the date of applying. However,  it may be extended beyond 20 years in certain countries or a Supplementary Protection Certificate (SPC) may be provided in certain cases. The Patentee should pay renewal fees, but he need not pay any maintenance or renewal fee in the first two years. He can pay it every year or even pay it at the end of 20 years. If he fails to pay the fee, he ceases to be the holder of the patent which then comes under the public domain and loses its protection and thus, might be used by anybody without having to abide by any legal obligations. A Patent will cease to have an effect in case of any failure to pay the renewal fee within 20 years. 
As per Section 60 of the Patents Act, 1970, an application for restoration of such a Patent can be made by the Patentee. Such an application should be filed within 18 months to the Indian Patent Officer (IPO). The application must contain a statement providing the reason behind the failure in paying the renewal fees along with evidence which can be in the form of letters, documents, deeds, etc. If the Controller is satisfied with the reasons and evidence provided by the Applicant, he might publish the application. Any person can oppose it within a prescribed time. If the opposition gives notice within the prescribed period then the Controller may give a chance to both the parties to present their arguments. If there is no notice by the opposition, and the decision of the Controller is in favour of the applicant,  the applicant can then restore his patent by paying the unpaid renewal fee. A Patent obtained in one country is not valid in the other. It is not valid globally. If an inventor wishes to obtain a Patent in another country, he has to apply for it in that country. 

Patent Protection 

  1. Conditions for Patent protection 

Why should Patents be protected? Patent protection safeguards the innovation of a person by preventing it from being commercialised, sold, exported, used, and distributed by others. There are various conditions which are to be satisfied to obtain Patent protection. 

Conditions:

  • Patentable: The innovation must be eligible for Patent protection, i.e. it must be unique and patentable under law. 
  • Novelty: There must be some part of it which must be new. It must be technical with a technical contribution and must provide a solution to a technical problem.
  • Non-obvious: There must be an inventive step. The difference in the invention, when compared to the prior part, must be obvious to a person with ordinary skills in the technology used in the invention. 
  • Industrial Application: It must be capable of being used in any industry or for business purposes. The technical solution to a technical problem must involve an industrial application. 
  • Legality: Inventions which are against public policy or morality do not qualify as Patents. Any Patent used only for chemical warfare or clothing is not patentable. Some biotechnological inventions are also excluded from being patented. Also, any other patent which, if patented, is a risk to humans, animals, plants or might cause an environmental damage cannot be patented.  
  1. Granting Patents

A Patent is granted by the National Patent Office or the Regional Office. The Regional Patent Offices in operation are:

If all the criteria and conditions are met, then an application for a Patent is filed in the Regional Office which will have the same effect as those filled in the National Patent Office. 

  1. Cost of patenting 

The cost of patenting varies from country to country and from one innovation to the other. The cost also depends upon factors like the complexity of the invention, its nature, length of an application, etc. However, there will be a renewal fee for the Patent and if the inventor wants the invention to be patented abroad, that cost must also be considered.  The inventor can make the document by themselves but if any complications or legal questions arise,  a patent attorney should be approached for the drafting.  

Amendments in the Patents Act, 1970

According to the World Trade Organization (WTO) Agreement on Trade-Related Intellectual Property Rights, patents should be available to all WTO member states. The Act remained in force till 1994. An ordinance which was issued to operate with certain changes ceased to operate within six months. Another ordinance was issued in the year 1999 which was replaced by the Patents (Amendment) Act, 1999. This Act came into force with a retrospective effect. This Act provided various provisions for filing applications with respect to chemicals, agrochemicals, drugs, etc. But these applications were entertained only after 31.12.2004. Meanwhile, the applicants could trade their innovation with Exclusive Marketing Rights (EMR). 
The second amendment was made in the year 2002. This amendment which was implemented with an introduction to New Patent Rules, 2003 replaced the old Amended Act. The third amendment was introduced in the year 200, and yet again it was replaced by the Patents (Amendment) Act,  2005. 

  • The Patents (Amendments) Act was passed with a retrospective effect from 2005.  
  • Section 5 regarding Patents for drugs, medicines and their qualifications was inserted. 
  • Chapter IVA was inserted, namely, Section 24A which was about the application for grant of exclusive rights. The application submitted in the prescribed manner and as per the prescribed fee will be then sent to the examiner for further examinations on whether it is an innovation or will it qualify as an innovation. 
  • Section 24B is about the grant of exclusive rights. It talks about inventions made in India and outside India and the consequences of claims on it on or after January 1995. 
  • Section 24C talks about Compulsory Licenses. Section 24D, about special provisions for selling or distribution. Section 24E, about suits relating to infringements and Section 24F, states that the Central Government and its officers shall not incur any liabilities. 
  • Section 39 of the Principal Act was omitted which stated about “Residents not to apply for patents outside India without prior permission”.
  • In Section 40, the words “or makes or causes to be made an application for the grant of a patent outside India in contravention of section 39” was omitted. 
  • In Section 64(1) (n) the words “or made or caused to be made an application for the grant of a patent outside India in contravention of section 39″ was omitted. 
  • In Section 118, the words, “or makes or causes to be made an application for the grant of a patent in contravention of section 39” was omitted.
  • Section 157A was inserted. It said the Government of India shall neither reveal any information regarding the Patent it feels is important for India nor take action including revocation, which is of utmost importance, in the interest of India. 

Thus, the points above-mentioned were the changes made to the Principal Act, i.e. the Indian Patents Act, 1970.

Different types of Patents

Variety in Patents help the inventor in protecting their innovations against copying. The types are broadly classified into four. They are as follows :

  • Utility patents: The name says it all. It is a type of Patent that helps the public to understand how the machine works, its processes, etc. This Patent can also be obtained through any new invention to the already existing machine. The processes involved may be technical and industrial. 
  • Design Patents: It is called “surface ornamentation” of the product as it protects the ornamental design of a product. It can be obtained only when the ornament is inseparable from the product. The patent will only protect the object’s appearance. It is nowadays used to protect the shape of user interfaces. 
  • Plant Patents: It is obtained to protect the innovation of new plants. It focuses on conventional horticulture and does not include genetic organisms. The plant should be capable of asexual reproduction. The requirements are that it is not uncultivated, and is not tuber propagated. 
  • Provisional Patent: It is a Patent widely accepted in the United States. It is just an informal application that is submitted to prove that the Patent was owned by the inventor. The Utility Patent has to be filed within a year after filing the Provisional Patent. 

Landmark Cases 

Bajaj Auto Limited v. TVS Motor Company Limited 

This case applies to the unauthorised application of patents DTSi technology. The case was filed by Bajaj Auto Ltd. along with the State of Maharashtra against the Defendants on grounds that they have infringed the Patent of the Plaintiffs obtained on the invention of the technology of an advanced internal combustion engine. The Plaintiff subsequently received a permanent injunction from allowing the Respondents to use and sell their market innovation.
The Hon’ble Supreme Court of India observed that the Intellectual Property (IP) cases generally file for a temporary injunction. It directed all other Courts to dispose of all the IP cases and informed them to function on a day to day basis and provide judgement within four months from the date of filing. 

Novartis v. Union of India  

This landmark judgement of the Hon’ble Supreme Court helped other companies understand the nuances and loopholes of the law. Novartis filed an application to Patent one of its innovations called “Gleevec”. It fought for almost seven years when the SC rejected its application.
The SC gave the following reasons for rejection. 

  • There was no invention; it was just a discovery of an already existing innovation. 
  • Apart from proving the traditional tests of novelty, as per Indian Patents Act 1970, for the grant of pharmaceuticals, there is a new test of enhanced therapeutic efficacy for claims that cover incremental changes to existing drugs which also Novartis’s drug did not qualify

Bayer Corporation v. Union Of India

The first compulsory license was granted by the Indian Patent Office to Natco Pharma Ltd. for producing a generic version of Bayer Corporations’s patented medicine Nexavar (Sorafenib Tosylate), which is used in the treatment of liver and kidney cancer. It earned around 2.8 lakhs and it promised to pay 3% of it to Bayer and 6% of its net sales as royalty to Bayer. It was directed to manufacture the medicine with its raw materials and sell it only within the Indian Territory and provide it at free of cost to at least 600 people who are deserving and in need of it.
Aggrieved by this decision, Bayer approached the Intellectual Property Appellate Board (IPAB) by applying for a stay which was rejected by the IPAB contending that if it was done, it would be against public interest and it is their Constitutional Right to get access to affordable medicine. By affordable, it meant, at a reasonable cost. Bayer filed an appeal but the Board was very clear that the invention must be affordable to the public. The board further held that, if any of the conditions in Section 84 of the Act regarding compulsory licenses is satisfied, then the company is still capable of obtaining a compulsory license.
The board upheld the decision of the Controller and held he was right in all his words. It raised the royalty to 7% and dismissed the appeal and confirmed a compulsory license.

Conclusion 

If there was no Patent system, the lack of protection of innovation would have jeopardised the interests of an inventor. We need to focus on the mechanism that adjusts the Patent system. It is evident from the above-discussed points that Patents promote innovation. Considering Artificial intelligence (AI), a few decades ago humans played badminton which is very easily done by an AI today. The aspects in which AI plays an important role are telecommunications, transportation, life and medical sciences. Researchers are still working to revolutionize human activity. There might be disputes between commercial viability and a true inventor. For example, a man who is the true inventor of AI and if this primary AI subsequently produces another AI, there arises a conflict on whether the man should obtain the Patent right or the primary AI and this conflict still remains unanswered. 

References 

  1. www.wipo.int 
  2. https://economie.fgov.be/en/themes/intellectual-property/patents/conditions-patentability
  3. Bajaj Auto Limited V. TVS Motor Company Limited JT 2009 (12) SC 103
  4. Novartis V. Union of India (2013) 6 SCC 1
  5. Bayer Corporation V. Union Of India
  6. www.indiankanoon.org

Questions

  1. What are the conditions for getting a Patent?
  2. How many years is a Patent valid for? What type of Patent cannot be cancelled?
  3. How should one obtain a universal Patent? 

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