Bry-Air Prokon SAGL & Ors. v. Union of India & Anr.

15. On 16.05.2016, an amendment was made to Rule 138 of the Rules which is as under:

16. A holistic reading of Section 21 of the Act and Rules 24(B) and 138 shows that from the date on which the first statement of objections is issued, a period of six months, extendable by a period of three months, is available to the Applicant to put the application in order. Therefore, this period is an outer time limit and deadline within which the entire process of objection and reply is required to be completed. Section 21 comes into play the moment the deadline is exceeded and in the absence of compliance by the Applicant by putting the application in order, the application will be treated as abandoned by a deeming fiction of law. Rule 138 further enforces the rigid timelines envisaged by the Legislature whereby the Controller has discretion of granting extension limited to a period of one month only and therefore, the inevitable conclusion is that the deadlines posited by the Legislature for putting the application in order are mandatory.

17. In European Union Represented by the European Commission (supra), Court was in seisin of the scope of the power in a writ jurisdiction under Articles 226 and 227 of the Constitution of India. After deliberating on the issue and relying on several judgments in this context, the Court observed that the powers of the Controller are circumscribed by the provisions of the Act and the Rules and he does not have the discretion to extend the timelines prescribed therein especially those timelines that are specifically excluded in Rule 138 of the Rules. However, insofar as the jurisdiction of a writ Court is concerned, it was held that in rare cases, the Court may grant extension in filing response to the FER after examining the factual matrix to see whether the Applicant intended to abandon the patent and/or was negligent or any other extraordinary circumstance such as negligence by the Patent Agent. Placing reliance on and following several earlier decisions on the subject, Court held as under:-

32. Telefonaktiebolaget Ericsson v. Controller of Patents [W.P. (C) 9126 of 2009, decided on 11th March, 2010] - [Third Category]. • The patent application was filed on 29th July, 2005 and the applicant filed a request for examination within the prescribed time. • The FER was issued on 8th October, 2007. • On 10th December, 2007, objections in the FER were replied to. • On 25th June, 2008 further objections were communicated which were raised by the patent office in terms of a Second Examination Report (hereinafter, ‘SER’) • Last day for complying with objections was 8th October, 2008. • Further reply was filed on 22nd September, 2008 in respect of the objections raised in the SER. • Curiously, the patent office passed the order on 10th October, 2008 and held that the time for putting the application in order to grant had expired on 8th October, 2008 and accordingly, the application was deemed to have been abandoned under Section 21(1) of the Act.

33. In this context, the ld. Single Judge observed that it is only if no reply is filed at all that the application could be deemed to have been abandoned. In any event, the abandonment requires a conscious act, which is to be manifested. The relevant observations as under:

34. Nokia Corporation v. Deputy Controller of Patents [W.P. 2057 of 2010, decided on 24th January, 2011] - [First Category]. • On 18th August, 2009, the national phase application was filed in India. The PCT National Phase application sought priority from the US application dated 11th January, 2007. • The delay in this case was in respect of the 31 months period for filing of the application in India under Rule 20(3) of the Rules. The Deputy Controller of Patents held that in respect of an international application, designating India, was required to be filed with the prescribed fee within the time limit i.e., 31 months from the date of priority as envisaged under Rule 20(4) of the Rules. • According to the Dy. Controller of Patents, 31 months' period had lapsed and applying Rule 22 of the Rules, the application was held to be ‘deemed to be withdrawn’. Condonation of delay had been sought by the Applicant and a hearing was also given. • The challenge raised was that the time period for filing a national phase application was provided in the Rules and not in the Act. It was contended that in any event, however, a one month extension was permissible. • The Court held that if good cause is shown for delay in submitting the application, one month extension can be granted even if the said application was not moved within the period of 31 months. The observations of the Court are as under:

18. Significantly in European Union Represented by the European Commission (supra), the patent applications were deemed to have been abandoned on account of the negligence of the Patent Agent in not filing reply to the FER within the stipulated timelines and the contention of the Applicant was that despite continuous follow up, the Patent Agent had not responded and the delay was not attributable to the Applicant. Condonation of delay in filing the reply was sought contending that valuable rights in the patents had been lost for no fault of the Petitioner. Examining the issue from this perspective, the Court observed as under:-

19. From a reading of the aforementioned judgments, the position of law that emerges is that Courts while exercising writ jurisdiction have extended the time for filing response to the FER in extraordinary situations, where Patent Agents were found to be negligent in prosecuting the Patent Applications, with no contributory negligence of the Applicant and on showing that the Applicant had a positive intent to prosecute. It is equally settled that ‘Abandonment’ requires a conscious act on the part of the applicant, which would manifest the intention to abandon and no presumptions can be drawn in this respect. It also needs no reiteration that deemed abandonment of the application for grant of patent, leads to serious impact on the valuable rights of the patent applicant, which flow in favour of an invention and this is compounded by the fact that under the statutory scheme, no appeal is provided against an order of deemed abandonment of the application for patent under Section 21 of the Act. Therefore, each case would require examination on its own facts and circumstances to see the intent of the applicant to abandon.

20. In order to substantiate the plea that Petitioners had been diligent in prosecuting the patent applications and the patent IN293448 and that there was no intent to abandon the prosecution as well as to establish the negligence of the first Patent Agent, a chronology of dates and events has been given by the Petitioners. The narrative is as follows:- PATENT APPLICATION 34/DELNP/2013

IP/Legal to inter alia manage IP portfolio of the Petitioners. Between 22.10.2020 to 13.12.2021, reminders were again sent to the first Patent Agent, who maintained that the hearing regarding the restoration of the applications was likely to be conducted in the near future. Petitioners thereafter realized that the first Patent Agent was not diligent in pursuing the matter and was perhaps reporting incorrect status, they engaged new agents in January, 2022 to prosecute and process the patent application. On 21.02.2022 when the new Agent made an enquiry with the IPO with regard to the FERs for other applications, they learnt that FERs had been generated for the five applications, being the subject matter of the present petition and duly communicated to the first Patent Agent, however, due to non-filing of reply, the applications were deemed to be abandoned.

PATENT APPLICATIONS 1446/DEL/2010, 178/DEL/2012 3735/DEL/2011, 68/DEL/2015 and 81/DEL/2014 and PATENT IN

A. FERs were issued by Respondent No. 2 in respect of patent applications 1446/DEL/2010 and 178/DEL/2012 on 06.10.2017, while FER was issued on 22.06.2018 for application NO. 3735/DEL/2011.

C. FERs were issued on 19.03.2019 in applications 3735/DEL/2011 and 68/DEL/2015 and for application 81/DEL/2014 on 29.05.2019.

Patent Agent on the status of patent application 34/DELNP/2013, which led to Petitioners apprehending risk to the other application and patent and appointed a Deputy Manager IP/Legal on 09.11.2020. On 12.11.2020, Petitioners were informed by the Agent that on checking the status for application 1446/DEL/2010 from IPO, he was informed that the response was not on record on account of which the application was deemed abandoned, however, he assured that the response would be located and placed on record. The Agent also informed that restoration of two applications 34/DELNP/2013 and 81/DEL/2014 would be done in 3 to 4 weeks. Between 27.02.2021 to 06.10.2021, the Agent kept assuring that he was consistently checking the status of all patent cases and taking requisite steps for restoration. On inquiry about filing of Form-30s on 16.12.2021, Petitioners were informed that the same were being compiled and would be dispatched shortly, however, on receiving the Form-30s after a gap of time, Petitioners highlighted to the Agent the inconsistencies in the Forms and realising negligence of the Agent. Petitioners transferred prosecution to new Agents.

21. Petitioners have annexed various documents including correspondence with the agent to support the plea that they had been diligent in prosecuting the matter. As an illustration, some of the documents referred to are as follows:- (a) Key Correspondence in relation to 34/DELNP/2013: • Annexure P15, p135: Email correspondence between Petitioners and foreign agents, attaching the erstwhile agent’s email dated 24th November 2019 to the Indian Patent Office which falsely states that he has not received the First Examination Report. • Annexure P18, p139: E-mail dated 3rd March 2020 in relation to 34/DELNP/2013, from erstwhile agent to foreign associate stating that the Patent Office had said they would review the request for restoration of rights. • Annexure P22, p.143: Pursuant to repeated follow up, erstwhile agent states on 20th November 2020 that action will be taken with respect to 34/DELNP/2013 within 6-8 weeks. • Annexure P23, P25, P27 at p.144,146,148: Further follow up from Petitioners’ foreign associate on various dates in 2021. • Annexure P24,P26,P29 at p.145, 147, 150: E-mails from the erstwhile agent on various dates in 2021, reassuring foreign associate that the matter will be listed for hearing. • Annexure P-29, p.150: E-mail dated 13th December 2021 from erstwhile agent to Petitioners foreign associate in respect of 34/DELNP/2013 stating that a hearing would be scheduled in two weeks. (b) Key Correspondence common to all applications: • Annexure P32, p167: E-mail dated 12th November 2020 from erstwhile agent assuring the Petitioners that the “problem” with respect to Patent Application 34/DELNP/2013 and 81/DEL/2014 would be resolved in two weeks. • Annexure P33, p168: E-mail thread between Petitioners and erstwhile agent showing repeated follow up by the Petitioners, and repeated misrepresentation that the matter would be resolved. • Annexure P34, p171: Email dated 27 February 2021, where the Erstwhile agent says in regard to Applications erroneously shown as abandoned he is advised that a hearing will take place on March 11, 2021. • Annexure P37, p175: Email 6 Oct 2021 from erstwhile agent say he has been asked to file a personal affidavit in support of request to reissue the First Examination Report, and sharing a draft affidavit. • Annexure P39, p185-190: Correspondence in December 2021 between erstwhile agent and Petitioners following up further on the matter. • Annexure P44, pg 315: Email dated 21 Feb 2022 from Respondent No. 2 to the new patent agents of the Petitioners confirming that the FERs in respect of patent applications 178/DEL/2012, 81/DEL/2014 and 68/DEL/2015 was sent to the erstwhile agent on his email IDs.”

22. Upon perusal of the above facts and supporting documents, it is clear that the first Patent Agent had not informed the Petitioners of the issuance of the FERs and they were also kept in dark about the status of the applications. E-mails were regularly sent to the Agent by the Foreign Associates as well as the Petitioners seeking updates with respect to the applications for restoration, after the Petitioners learnt of the fact that they were deemed to have been abandoned. Correspondence also reflects that the first Patent Agent consistently informed the Petitioners that he was following up the matter and the restoration applications were pending with the IPO. Petitioners are, therefore, right in contending that on account of their long association with the first Patent Agent, they had no reason to doubt him or to suspect that the input given by him, from time to time, was doubtful. Petitioners have been able to show that as soon as they learnt of his negligence, they engaged a new agent, who took prompt action not only in finding out the current status but also made representations for revival/ restoration. The documents on record do not indicate that the Petitioners were negligent or had any intent to abandon their patent applications.

23. It is a settled position of law that errors/negligence on part of the patent agent without any contributory negligence on the part of the Applicant, has been liberally considered by the Courts, as the consequences of a patent application being abandoned or the lapsing of a patent due to non-deposit of renewal fee are very serious, where the applicant loses his right of claiming exclusivity to an invention.

24. A caveat may, however, be added that the Court must exercise the writ jurisdiction only in extraordinary circumstances. In European Union Represented by the European Commission (Supra), the Court has rightly cautioned that the intention of the Legislature in Rule 138 of the Rules as well as the mandate in Section 21(1) of the Act cannot be ignored and failure to adhere to the timelines must be visited with serious consequences. In the facts and circumstances of the present case, this Court is of the view that there is no fault or negligence on the part of the Petitioners and therefore, they should not suffer for the fault or negligence of the Patent Agent, and the present case fits into the exception of ‘extraordinary circumstances’. Petitioners are thus entitled to file a response to the FERs with respect to the six patent applications so that they can be processed further.

25. Present writ petition also concerns patent IN293448 which has lapsed on 27.05.2018. Patent application was filed on 13.10.2009 and the patent was granted on 27.02.2018. Due date for payment of annuities under Section 142(4) of the Act, i.e., 3 months from the date of grant was 27.05.2018. The extended date available to a patentee under Section 142(4) of the Act, i.e. total 9 months from the date of grant, was 27.11.2018. Section 53(2) of the Act provides that a patent shall cease to have effect on expiration of period prescribed for payment of renewal fee, if that fee is not paid within the prescribed period or within such extended period, as may be prescribed. Section 60(1) of the Act comes into play where the patent has ceased to have effect for non-payment of renewal fee within the prescribed period and enables the patentee to seek restoration within 18 months from the date on which the patent ceased to have effect. As afore-noted, Petitioners have been able to demonstrate that the first Patent Agent was negligent in prosecuting the patent applications as well as this patent. The patent has lapsed on account of non-payment of annuities within the time prescribed by the Statute. Petitioners are, in my view, correct in their contentions that having had a long association with the first Patent Agent since 2012, they had no reason to doubt the statements made by the first Patent Agent that initially, he was following up the matter and later he was taking requisite steps for restoration. In fact, a host of documents have been placed on record reflecting correspondence and a regular follow up by the Petitioners, seeking updates and giving instructions to actively prosecute. Petitioners have also placed on record an e-mail dated 13.12.2021 annexing a status chart sent by the first Patent Agent to the Petitioners, where patent IN293448 is mentioned with a noting that there are standing instructions to renew the same. An affidavit sworn by the first Patent Agent is also on record, which is self speaking and wherein the first Patent Agent has, in so many words, stated that his authorization included filing of patent applications at the IPO and prosecuting the same until grant and thereafter for payment of annuities to keep the granted patents in force as also to respond to communications from the IPO and take all necessary actions to see that applications do not lapse due to inaction. It is also stated that at no point in time, he was under any instruction from the Petitioners to allow any patent application to lapse due to non-payment of fee, non-filing of response, etc. In fact, on the basis of this affidavit, IP Australia has restored the patent applications and the document is on record of this Court.

26. Relevant would it be to note that In European Union Represented by the European Commission (Supra), patent applications were restored by the Court on account of the negligence of the Agent which coincidentally happens to be the same agent as in this Court and as rightly pointed by the Petitioners in the said case albeit in the case of the patent applications, the writ petition was allowed extending periods of 40 months and 38 months respectively, in respect of two patent applications. In PNB Vesper Life Science Pvt. Ltd., Represented by its Director Mr. P.N. Balaram v. Controller General of Patents, Designs & Trademarks, 2022 SCC OnLine Mad 3190, it was held that if there is nothing on record which indicates that Petitioner has willfully neglected, benefit of doubt must be given and this is an embodiment of a fact which cannot be gleaned over that valuable rights vest in a patentee on grant of a patent and therefore, if the Applicant is not at fault, he should not be deprived of his rights to enjoy the fruits of his skill, hard work and labour.

27. In OA/18/2014/PT/KOL titled as Rubicon Research Pty Ltd. v. The Controller General of Patents, Designs and Trademarks and Ors., decided on 21.08.2020, the patent application was filed on 17.02.2003, which matured into a grant of patent on 02.03.2007. On 24.05.2007, the Patent Agent sent a letter to the Australian Agents of the Appellants therein, intimating the grant of patent and for payment of 3rd -7th annuities, which was a week before the due date. The Agent sought instructions for payment and a debit note was raised, which was cleared by the Appellants within the extendable period of 9 months under Section 142(4) of the Act. After a gap of two and a half years, the Patent Agent informed the Appellants that the patent had lapsed due to non-payment of annuity. The application for restoration was rejected by the Controller. The IPAB, however, held in the facts of the case that prejudice would be caused to the Appellant in case it lost the patent rights for fault and negligence of the Agent and the order of the Controller was set aside, finding the same to be unreasonable. It bears repetition in the present case that on account of the admitted negligence of the Agent, there is no plausible reason why the Petitioners should suffer.

28. There is an added reason why this Court is inclined to permit the Petitioners to file for restoration of the patent. As noted above, the period of three months under Section 142(4) of the Act for payment of annuities expired on 27.05.2018. An extended period of six months from the said date was available to the Petitioners for payment of annuities under Section 142(4) of the Act. Additionally, under Section 60(1) of the Act, Petitioners are entitled to make an application for restoration of the patent within 18 months from the date on which the patent ceased to have effect. If the first Patent Agent had been diligent, the annuities would have been deposited by 27.05.2018 or within the extended period expiring on 27.11.2018, on the extension being sought. As per the provisions of the Act, if the fee was not paid within the extended period, Petitioners were entitled to approach the Controller upto 27.05.2020 under Section 60(1) of the Act. Since the Petitioners were unaware of the non-prosecution by the first Patent Agent and in depositing the annuities, the benefit of the extended period of 6 months was lost. Insofar as the 18 months period available to an Applicant under Section 60(1) of the Act is concerned, as rightly contended by the Petitioners, a part of this period overlapped with the Pandemic COVID-19 and they are entitled to the benefit of the extension of limitation period by the Supreme Court in SMWP (C) No. 3/2020 In Re: Cognizance for Extension of Limitation. Vide order dated 10.01.2022, the Supreme Court directed that in cases where limitation would have expired between 15.03.2020 to 28.02.2022, notwithstanding the actual balance period of limitation remaining, limitation shall extend for a period of 90 days from 01.03.2022. As averred in the appeal, Petitioners have approached the Controller albeit with a representation on 12.05.2022, seeking restoration of the patent and are squarely covered by the said judgment. Looking at the extraordinary facts and circumstances of this case, as aforementioned, in my view, it would be a travesty of justice if on technical grounds the Patent is allowed to lapse. Petitioners are thus held entitled to file an application for restoration, in the prescribed Form along with the prescribed fee, within a period of 4 weeks from today.

29. Accordingly, impugned orders dated 06.08.2018, 13.08.2018, 04.01.2019, 14.10.2019, 05.11.2019 and 18.12.2019, issued by the learned Controller of Patents and Designs, are quashed and set aside.

30. The patent applications bearing nos. 1446/DEL/2010, 3735/DEL/2011, 178/DEL/2012, 34/DELNP/2013, 81/DEL/2014 and 68/DEL/2015 shall be restored to their original position. Petitioners are permitted to file their response to the FERs, within a period of 4 weeks from today. Upon the response being received, Respondent No. 2 shall take on record the same and the examination by the Patent Office shall proceed in accordance with the provisions of the Act and Rules. Insofar as the patent IN293448 is concerned, upon the Petitioners filing restoration application within the time granted by this Court in the prescribed format and the prescribed fee and/or on completion of other necessary formalities, if any, the Patent Office shall consider revival/restoration of the patent in accordance with the Act and Rules.

31. Writ petition is allowed and disposed of, in the aforesaid terms.