In an ideal world the patent office’s role should be limited to administrative activities i.e. the examination and grant of patents. We don’t live in an ideal world. The Indian Patent Office not only decides on patent applications but has also found itself burdened with the additional functions of deciding both pre-grant & post-grant patent oppositions apart from granting compulsory licences targeted at remedying anti-competitive activities of patentees. The fundamental question that we must ask ourselves at this stage is whether the patent office, operating under the aegis of the Ministry of Commerce, should even be adjudicating such disputes which are of a judicial nature. One of the underlying principles of the Constitution of India is that there must be a separation of powers between the three arms of the State i.e. the Executive, the Legislature and the Judiciary must each operate in their own spheres i.e. the Legislature must legislate and lay down the policy in the form of a law, the Executive must execute this policy keeping with the law and the Judiciary must decide the disputes that arise from any violation of the law. While each arm operates independently they are accountable to each other through a system of checks and balances. Such separation of powers is the cornerstone of most democracies and is one of the principle reasons that a democratic form of government is one of the most stable models for governance.
Although the Doctrine of Separation of Powers is not as clearly enunciated in the Indian Constitution as it is in the American Constitution, the Supreme Court of India has held in a series of judgments (the epic case of Keshavnanda Bharti included) that the doctrine of separation of powers forms a part of the basic structure of the Indian Constitution which cannot be amended by the Parliament. The most recent judicial exposition of this doctrine was in the case of Madras Bar Association v. Union of India where the Madras High Court in an excellent judgment concluded that the National Company Law Tribunal as also a National Company Law Appellate Tribunal were unconstitutional because they violated the doctrine of separation of powers. The case was appealed to the Supreme Court and arguments were concluded only recently. Please do read Mihir’s excellent post on this case on the India Corporate Law blog. The main objection raised in this case was that the Parliament through the impugned legislation was transferring “intrinsic judicial functions” away from the High Courts and to a tribunal lacking the degree of independence that was required of a body discharging a judicial function. The objection was not that the High Court were being outsed from hearing company law matters but the fact that the new tribunal was virtually an extension of the executive especially since the tribunal was lacking in both institutional independence and individual independence. This lack of independence was attributed to the system of appointments as also the qualifications for the appointments which sometimes bore no rational nexus to the post that was sought to be filled. (For e.g. How does a person armed with science degree useful in deciding a company law dispute?)
The question is whether we can extend this logic to the adjudicatory role of the patent office while deciding opposition proceedings as also compulsory licences for anti-competitive activities. The essential distinction that we must draw here is whether these functions can be characterized as an “administrative function” or as a “judicial function”? In his judgment in the case of Shankarlal Aggarwala v. Shankarlal Poddar AIR 1965 SC 507 Justice Ayyangar (of the Ayyangar Report on Patent Law fame) held that “It is perhaps not possible to formulate a definition which would satisfactorily distinguish, in this context, between an administrative and a judicial order. That the power is entrusted to or wielded by a person who functions as a Court is not decisive of the question whether the act or decision is administrative or judicial. But we conceive that an administrative order would be one which is directed to the regulation or supervision of matters as distinguished from an order which decided the rights of parties or confers or refuses to confer rights to property which are the subject of adjudication before the Court. One of the test would be whether a matter which involves the exercise of discretion is left for the decision of the authority, particularly if that authority were a Court and if the discretion has to be exercised on objective, as distinguished from a purely subjective, consideration, it would be a judicial decision. It has sometimes been said that the essence of a judicial proceeding or of a judicial order is that there should be two parties and a lis between them which is the subject of adjudication, as a result of that order or a decision on an issue between a proposal and an opposition.” (para 9)
Both Opposition proceedings and Compulsory Licensing proceedings are essentially adversarial proceedings where the Patent Office is deciding a lis between two parties. In fact as per Sec. 77 of the Patent Act the Controller is empowered to function as a Civil Court and his powers under this section extends to issuing summons, administering an oath, requiring the discovery and production of any document, issuing commissions for the examination of witnesses or documents, and even awarding costs. In opposition proceedings the Patent Office hears arguments from two opposite parties and decides as to whether or not a patent should be granted or whether a granted patent should be revoked. In a compulsory licensing proceeding the Patent Office decides whether or not the patentee is fulfilling the reasonable requirements of the public. This power extends to deciding whether or not the patentee is selling the product at a ‘reasonable price’. Clearly these proceedings are deciding the rights of the citizens. There can be no dispute over the fact that both these proceedings are “intrinsic judicial functions”.
Both of these proceedings are conducted under the direct supervision of the Controller. Under Section 25 the Opposition Board is constituted by the Controller. Under Chapter XVI all CL applications are made to the Controller. And who is the Controller? Usually a patent specialist from within the ranks was appointed as the Controller but for the first time the Government of India has appointed a career IAS officer as the Controller of Patents. In effect we have the Government of India deciding the rights of its citizens. To what level of executive interference are these proceedings open to? Can the Government of India influence an opposition proceeding as also the grant of a Compulsory Licence? Under the present structure, the Executive arm of the Government can definitely influence these proceedings because it is their representative who is heading the patent office. The essential question over here is not whether such interference is taking place but whether there is even the theoretical possibility for such interference to take place.
Coming to the qualifications of the officials of the Patent Office I’m not quite sure where exactly to research this aspect because the Act lays down absolutely no statutory requirements in this regards. This is a matter that I’ll deal with in a later post. Please do write in with any information that you may have in this regards.
For now let it suffice to say that the adjudicatory function of the Patent Office is patently unconstitutional because of the lack of insitutional and individual independence of the entire statutory mechanism prescribed under the Patents Act. The question is whether the IP Bar is ready to tackle this problem in the same manner that the Madras Bar Association dealt with the National Company Law Tribunal?
Patent opposition cases are not simply legal cases. They are techno-legal cases which require the involvement of technical experts. No other patent office in the world has separated the legal function of the Patent Office from its technical aspect. Doing so in India would set a dangerous precedent as not all lawyers would be in a position to understand cases involving technical matters. Hence it would be better to let matters continue in the present fashion and think about other ways of streamlining opposition mechanisms in India.
Patent Act reflects that Controller General and other Controllers are “quasi judiciary” authorities (similar to executive magistrates. To the best of my knowledge, the Opposition proceedings, grant of compulsory licence etc. are dealt by another Controller different from the person who allowed the Patent. So it may not be a serious problem to vest those judicial powers with the Controller. Of Course, it is not the exactly the Controller General who exercises the judicial powers, since these functions are delegated to experienced Controllers. So it is a waste of time to debate on the appropriateness of having an IAS Officer as CG.
@ R S Praveen Raj: You are free to agree or disagree with my post but please do not tell me it is a waste of time. I detest such statements.
Besides I think you have missed the entire point of my post. The point in my post is not only on whether an IAS officer or an official from the Patents Office should be the Controller. Instead the central point is on whether or not the Central Government can influence the opposition proceedings. Under the current scheme the Central Government is in a position to influence the opposition proceedings because the patent office is effectively under the control of the Central Government. Under the current system what are the safe-guards against any possible interference by the Ministry in the opposition proceedings? None. This when the opposition proceedings are judicial proceedings and not administrative proceedings. The reason that we insist on judicial independence for our courts is that they need to work in an atmosphere of least interference and trust me – given the stakes involved in patents these days it is very likely that the government maybe tempted to interfere in opposition proceedings. They could be doing this under pressure for either side i.e. the patentee or opposition.
At Praveen Raj who says:
“To the best of my knowledge, the Opposition proceedings, grant of compulsory licence etc. are dealt by another Controller different from the person who allowed the Patent.”
This is irrelevant. The challenge is not a natural justice – no man shall judge his own cause – challenge. the issue is of institutional separation of powers. Kindly read the Madras Bar Association case referred to above; you will realise what the point is.
@ the anonymous earlier
Valid point about technical matters being involved. Prashant, as a practical matter, are the issues mostly issues of law? How exactly does the appeal mechanism work?
@ Anon: I don’t think I’ve been clear enough. I’m not stating that only people with legal backgrounds should be hearing such disputes. I’m merely saying that whatever the procedure is it should be independent of governmental interference. Its perfectly alright to continue with the present people but lets make sure that the officials on the Opposition Boards are never required to submit to pressure from the government. I think that is a fair enough proposition. Don’t you?
@Anon 12:51 – In my opinion there are several issues of law that arise in the context of proceedings before the opposition board. For example a substantial chunk of the arguments will concentrate on statutory interpretation of terms and phrases used in the Patent Act. Clearly this is a matter of law. For example while defining Section 3(d) ‘efficacy’ should the court use a specialist dictionary or should it use a normal dictionary – this is a question of law – I can pull out several judgments on this point. Again questions of which parties have a right to be heard at the stage of pre-grant is another point of substantial law. I agree that there is a need for some technical knowledge but there is an equal if not greater need to know the law. As far as I know a degree in law is not a prerequisite for officials of the patent office. Please correct me if I’m wrong. At the very least these officials must be given a rigorous course in the basic principle of administrative law.
Prashant
PR,
How about the other ‘specialised’ tribunals that we have – eg the CEGAT and ITAT?
What are you views on those Tribunals’ functioning vis-a-vis separation of powers and the opposition hearing and the Patent Act?
Regards,
Frequently Anon.
I would think its more feasible to do so in a compulsory licensing situation, cause the issues involved would predominantly be law centric and public interest and less dependent on technical insight. Oppositions however are a complex matter and would require technical knowledge. You woudnt expect one guy to hear obviousness and anticipation and another guy to issue summons or ask for production of documents. I understand your point on separation of powers to minimize government influence..but that really leads us to ..like you said..establishing a separate Patent bar, with expertise for both technical and judicial analysis.
Frequently Anon,
ITAT has a judicial member and an accountant member. Appeals on substantial question of law are heard by the HC. But w.r.t. the ITAT, there is NO executive control after appointment. The patent situation is diff – the more appropriate comparison is with thwe CIT(Appeals). But the income tax scheme is clear – CIT (Appeals) is a departmental proceeding, subject to challenge before the ITAT. And the proposed National Tax Tribunal (which plans to exclude HC from appeals) is susceptible to the same challenge vide cases clubbed in Madras Bar
(Sorry above comment was mine, clicked though on Anon by istake)
Elaborating a bit –
As a final fact finding body which also decides quesitons of law, the ITAT has a judicial member as well as an accountant member. Appeals from this are before the High Court on “substantial quesitons of law”. Replacing the HC jurisdiction with another accountant+judicial body (such as the proposed National Tax Tribunal) will be a violation of the Constitution, on similar reasoning as in the Madras Bar Association case.
As far as the ITAT is concerned, undoubtedly there is an accountant member – so there is no reason (and I do think that it was Prashant’s argument) to say that there can be no specialist member. But the ITAT does retain its independence from the executive (unlike the CIT-Appeals). And it does have at least one member trained in the law.
So, if the analogy with the ITAT works, there would not be so much of a problem. But I doubt that the analogy does really work…
One of my bashful friends from law school who prefers to remain anonymous (but who for future post will be code-named Pee Pee;-)wrote me a lengthy mail which I reproduce below along with my reply:
“Dear Prashant,
How you call “examination and grant of patents” an administrative
function and opposition proceedings (including pre-grant oppositions!)
a _lis_ (and thus a judicial function) is unclear. Not every matter
that involves more than a single party is a _lis_. Pre-grant and
post-grant oppositions do not take place to change the rights of one
party vis-a-vis another, but to enable the Patent Office to correct
itself. During an opposition proceeding, what the opposing party says
is not really: “the applicant’s patent rights in his invention should
change”, but rather: “the Patent Office should not err by granting
this patent / the Patent Office has erred by granting this patent”. A
judicial case is never instituted to allow the court to correct its
decisions — it occurs to allow it to correct the decisions of the
parties / the Executive / the Legislature. (Only an appeal is made to correct its own decisions — a case is never instituted to do so.) A pre- or post-grant opposition occurs to allow the Patent Office to ensure it makes/made the right decision. It is for the benefit of the
Patent Office, and not the opposing party. That is why the free-rider
problem is such an issue with respect to oppositions — the opposer is
never the only one to benefit.
The powers that the Patent Office has been granted are to facilitate
it in the gathering of evidence. That in and of itself does not make
it a judicial or even a quasi-judicial body.
For compulsory licensing, you have a bit more of a case in calling it
a judicial proceeding, but even then I think your case is weak. Will write more later”
My response to him: I think examination and grant of patents along with pre-grant oppositions are all administrative proceedings because these proceedings are between the patent applicant and the patent office. I just noticed thanks to your comment that I should have focussed only on post-grant oppositions.
As for the opposition proceedings, it is irrelevant as to what the ultimate purpose is because there can be no one answer to it. What is relevant is the fact that the opposition proceedings affect the rights of two parties to carry out their business and this is enough for the proceedings to qualify as a “lis”.
For compulsory licensing my case is a lot stronger than you give me credit for. One of the main reasons that the Competition Commission is not yet operative is because the Supreme Court stayed its functioning on the very same grounds raised in this post i.e. there was no separation of powers. Given that nine out of ten times a CL is issued for an anti-competitive practice the Supreme Court’s dicta would be applicable to the patent office operating as an authority adjudicating on the grant of CLs.
Warm Regards
Prashant
Hey Mihir – Thanks for taking care of those queries. I have no clue as to how the ITAT functions. However I would like to clarify that I never said that there should be no specialist member on the board. I only said you also need people who have a degree in law. Having said all that I think the stress on the science degree is highly over-hyped. If a petition for revocation can be heard even by a non-specialist High Court judge why do you need a specialist on the opposition board – I think they already have a technical reports preparing reports on the factual aspects. One of my friends, who doesn’t have a science degree, tells me that some of the greatest IP judges never had a degree in science. Justice Rader for example has a degree in English literature. Justice Hugh Laddie began to study medicine but shifted to law ultimately. In fact if you go through the bios of judges of the CAFC over here: http://www.cafc.uscourts.gov/judgbios.html you’ll see that quite a few of them do not have a science degree and despite this they hear patent suits.
It would be interesting if you carry out an analysis on the IPAB and whether it is constitutional in its present form. 🙂
Cheers
Prashant
I think your position on pre-grant proceedings being administrative has been vetoed by the Madras High Court in the Roche Case. This has been dealt with earlier by yourself. Well, going by the decision in the Roche case, your stand on the ‘intrinsic judicial function’ principle is only strengthened, because the Court said that there is lis even at the examination stage. In my view also, the decision in the Madras Bar Association case would have to apply if the Court’s interpretation the in Roche case is accepted.