We are happy to present to you a guest post by Sejal Agarwal and Paazal Arora, students of the ILS Law College, Pune. They take notice of the increasingly common practice in patent filing of not including a Proof of Right; and examine the common defence of most institutional applicants, that pre-existing Employment Contracts sufficiently provide this Proof of Right. They argue that this defence should not hold up because submission of Form 1/Assignment Deed is compulsory to safeguard the interests of inventors and that the Patent Office should undertake a stricter scrutiny. (Long post follows)
What constitutes a valid proof of right for filing patent applications in India?
Sejal Agarwal and Paazal Arora
Given a conjoint reading of Section 6 and Section 7(2) of The Patent Act, 1970 along with Rule 10 of the Patent Rules, 2003, it is imperative to submit a ‘Proof of Right’ when an application for a patent is made by virtue of an assignment of the right to apply. Most of these patents are assigned by the inventors to the companies who are their employers. A proof of right is required to be submitted to show that there has been a valid assignment in favour of the assignee. The Manual issued by the Patent Office in 2011 in its Rule 03.01 specifies that such a ‘Proof of Right’ has to be furnished by way of either Form 1 or an Assignment Deed. In circumstances where the signatures of the inventors cannot be obtained on the Form 1 or Assignment Deed, such companies submit employment agreements as ‘proof of right.’ Through this post, the authors analyse whether it is compulsory to submit a Form 1/Assignment Deed or are surrounding circumstances taken into consideration while establishing a valid proof of right.
Most multinational companies include a clause in their contract of employment stating that “All IP generated by the employee in the course of his employment shall belong to the Employer.” There is a possibility that once the issue of non-submission of a valid ‘proof of right’ comes to the court, these companies may try to enforce such clauses to show a valid assignment in the absence of signatures, especially when such inventors are untraceable or dead. In such an eventuality, should the courts consider such clauses to act as a valid proof of right?
There have been several allegations in the recent past that most patent applicants do not follow the practice of filing the ‘proof of right’ in case of assignment of patents, and generally no objections are raised in this regard by the Patent Office. The Sugen case, covered on the blog, discussed the issue of ‘proof of right’ under section 7(2) of The Patents Act, 1970. The Form 1, filed by Sugen, for its Sunitinib patent, is available here and as you can see, the Form 1 does not bear the signature of a single inventor. It has the signature of only the patent agent involved in the process. The filing of a patent application by a multinational pharmaceutical company without even establishing its title to the invention generated quite the debate at the time. Many arguments were advanced and the carelessness of the Patent Office was also not ruled out as a possibility.
Though this ground of ‘proof of right’ was not raised in the revocation proceedings and the patent was revoked on other grounds, this analysis is relevant as in the absence of a valid assignment the invention is still to be credited to the true and first inventor and not the company applying for the patent. It is a well-established principle in the English Courts[1] that the fact that an invention made by the employee should belong to the employer depends on the contractual relations, express or implied, between the employer and the employee. The Ayyangar Committee Report which gives us a well-articulated insight into the regulatory mind-set with respect to patent policy in the 1970s only states that the consent of the ‘true and first inventor’ is required and is sufficient as proof of assignment under Section 7(2) of the Act. There is no mention of how such consent needs to be obtained, i.e. by way of mandatory submission of Form 1 or Assignment Deed or Employment Contract. Though the U.S. and English Laws also aim to safeguard the interests of inventors, they do not have such lengthy procedures. Even in the U.S. the signature of the employee is a mere formality to remind the employee of his obligation under the Employment Contract. If the employee refuses to sign or is not traceable then one can easily proceed in the absence of his signature by filing a petition under 37 CFR § 1.47(a). In light of these, the provisions of the Indian Act give a wide meaning to ‘proof of right.’ Since the Manual issued by the IPO interprets ‘proof of right’ under S. 7(2) to be filed mandatorily either by way of Form 1 or an Assignment Deed, has it overstepped the Act and tried to constrict its provisions? It is a point to consider that the Manual, an executive document may have gone the extra mile to make the patent law of the country stricter and more pro-inventors. At a time when big multinational companies seem to be trying to unjustly benefit and exploit individual inventors by imposing upon them such terms, which may go to the extent of exempting the company from all liability under the contract, then, in such a scenario should such Standard form of Contracts act as a valid consent of the ‘first and true inventor’? Such forms of contracts are known to be of a nature where the employees have an unequal bargaining power with the employers. It is necessary in such circumstances that the interest of the inventors must be protected and that can only be done by virtue of a Form 1 or an express stipulation by way of an Assignment Deed which takes the consent of inventors for each individual invention. This has been recognised and provided for in the Manual.
The Patent Office therefore, should be stricter with regards to acceptance of Assignment Applications, as later on at any point of time, a patent application can be challenged on ground of ‘wrongful obtaining of patent’ by way of revocation proceedings under Section 64(1)(c) of the Act. The fact however remains that since the very objective of the Patents Act is to safeguard the interest of the ‘true and first inventor,’ a patent which grants a monopoly right to the inventor and generates large amounts of revenue, needs extra care and caution to be exercised with regards to its ownership. So it’s time that the Patent Office stops sleeping over its responsibilities and acts in accordance with the law so that the interest of the inventors is not prejudiced and such inventors are encouraged to disclose their inventions without fear.
[1] Anemostat (Scotland) v. Michaelis, (1957) RPC 167; Triplex Safety Glass Co. Ltd. v. Scorah, Vol. LV RPC Page 21; Patchett v. Sterling Engineering Co. Ltd., Vol. LXXII, RPC, Page 50; Section 7(2)(b) of UK Patent Act, 1977.
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In executed Form 1 really a proof of right? Assignment of invention from one person (employee) to another (employer) is a contract. A contract requires “consideration” according to the Contract Law. There is no mention of “consideration” in Form 1. It then Form 1 a valid proof of right?
Dear Anon, Thank you for the question. While consideration is a basic ingredient of any contract, proof of right is not of the nature of a contract. It is merely a document/endorsement which contains the signature of the inventor to show that when the assignment took place the inventor’s consent was validly obtained.
If that interpretation is correct, then there has to be a separate deed of assignment between the inventor and the applicant. I doubt if such separate assignment exists at all. Most countries do not need an assignment now. So, the inventor execute Form 1 without any separate deed of assignment. Most of the inventors do not actually know why they are making a signature on Form 1.
With the online application, if you use Form 1 as proof of right, then two Form 1s are submitted to the IPO, one online and one offline.
Exactly. So if there is no previous arrangement wrt assignment between the inventor and the applicant and the former signed the Form-1. The same may be sufficient for the IPO but what about the inventor who realized much later that there had never been a consideration in the first place. Does he have any remedy other than for approaching under ‘wrongful obtainment’.
I dont blame the authors as they are very young and clearly have no clue about Patent Practice in India. Spicyip could be more careful in publishing generalized posts like these. More than 75% of the total applications filed at the Indian Patent Office are assignment applications and if you ask a practitioner like me, the Patent Office is so rigid about formalities that they can reject a pathbreaking invention on the basis of non-filing of formal documents. So i dont know what additional level of rigidity is sought. It would be great, if any specific cases are mentioned where Patent Office didn’t not care about proof of right, rather than make sweeping statements. Also, from 2004 till 2013, the Patent Office as well as applicants were following the CG instructions of 2004 which waived off this requirement for cases where proof of right was established in Convention/PCT application and worldwide rights to the applicant were already granted by the inventors in the priority application. However, after the IPAB decision of 2013 in the NTT DoCoMo matter, this requirement again became stringent and now the applicant has to go back to the inventors after several years of first filing to get Form 1 signed for filing at the Patent Office. To my knowledge, the Patent Office is ensuring that everyone abides by it.
Further, in a country where inventor remuneration is an aspect no one cares a dime about (Bill of 2008 is in cold storage and forgotten), why do we want the Patent Office to indulge in matters which don’t concern them and bring in this element of doubt on the assignee? The law is very clear about who can file, so as long as proof of right is filed, it should not become a contest between who is a more deserving applicant – inventor or assignee. Thank you.
Respected Anon, please understand that through this post I am not trying to point fingers at anyone. This article merely aims to make the inventors and the assignees AND the IPO aware of their rights and liabilities so that in future frivolous litigation is avoided. My post only contemplates that in event such a situation arises, these are the possible outcomes which may follow. While I have mentioned Sugen’s case, I would urge you to read the following link and the documents enclosed with it to bring further clarity to this discussion.
https://spicyipweb.wpcomstaging.com/2012/11/spicyip-tidbit-probing-further-sugens.html
Nice post in revealing the practices of the Indian patent office. At the same time, I would like to analyze the other side of this issue. I would also equally hold responsible law firms or patent agents in India, who file these applications with the patent office. My reasoning for this is as follows. The same requirement exists not only in USA or UK, but also in many other jurisdictions. In the case of a multinational company who is filing patent applications in many jurisdictions at the same time, I am quite sure that the company would try to get assignment deeds executed for the other jurisdictions and so getting the same done for India at the same time will not be a problem at all. It should be the job of the patent agent who handles the applications in India to advise them in this regard. From a practitioner’s perspective, what I usually do is to get assignment forms executed by the inventors at the time of filing the first application, so that we would not encounter problems when the inventors move on. By this way, the patent agents cannot state that inventors were not traceable and hence were not able to get the documents submitted.
And to add to this, I am quite sure that patent agents in India helping Indian applicants interface with foreign patent agents to file in other jurisdictions do ensure that all documentary requirements are met in those jurisdictions. Well, they have to. So, why this laxity for the Indian patent office alone?
The Indian patent office not enforcing this requirement is on one hand, but on the other hand is the complete disregard by patent agents in following this rule, especially when it is a rather important and mandatory requirement. Is this another display of our famous and well adored ‘chalta hai’ attitude?
I would like to thank Sejal and Paazal for a well-written post. I would like to share one aspect that has not been covered in the post and in the comments so far. In many patent offices, there is a formalities inspection of the filing, when an application is received and all the documents, drawings etc. are checked for meeting formal requirements. In my experience, we do not receive these formalities until substantive examination of the application is taken up.
This suggests a procedural improvement whereby the Patent Office can do the formalities check, say within a year of filing, and issue notice to the applicants as to the missing forms, including Form 1, if required.
Sometimes, inventors are busy or unavailable or not in the country, not cooperative etc. and in such cases, it becomes difficult to adhere to the 6-month time period. Currently the procedure to regularize delayed filing of Form 1 is not clear and could be specifically indicated as an option in the rules, or in the online filing system.
Two aspects have not yet been mentioned.
1. There are countries where the right to the patent belongs to the employer without an assignment being needed, at least for service inventions. In such cases, as the applicable law is the law governing the employment contract, no assignment is needed under the applicable law, and then Section 7(2) does not apply.
2. In PCT national phase applications, proof may be constituted by a declaration from the corporate applicant that he is entitled to be granted a patent in view of the fact that he is the employer. When the corporate applicant has filed such a declaration, India cannot require further evidence unless it may reasonably doubt the veracity of the declaration concerned, see Rule 51bis.2 PCT.