Guest Post: The Power to Suspend the Operation of a Patent

We bring yet another guest post by Mathews P. George, a fourth year student of NUJS.

As posted by Prof. Shamnad Basheer, IPAB has again stayed the operation of Ramkumar’s patent covering dual SIM phones. I have argued in my earlier post that IPAB does not have the power to stay the operation of patent. In this post, I shall argue that the Order favouring the existence of such a power lacks logic and coherence. (Image from here).

Background:
The petitioner applied for revocation of patent under section 64 of the Patents Act, 1970. In the said revocation application, two miscellaneous petitions were being filed – a stay application and an application for urgent and early hearing. The Appellate Board passed a stay order suspending the operation of the patent till the hearing of the stay petition on July 13, 2009. The Madras High Court set aside this Order and directed IPAB to hear the stay application expeditiously.

Order:
The Tribunal considered the fact that the order passed by the Customs authority pertaining to the prototypes was wholly adverse to the respondent. The Tribunal held that an extremely strong prima facie case of breach of section 64(1) (j) existed and the patent was liable to be suspended in the interest of justice. Balance of convenience was also held to be against the patentee as the patent had not been put to use. It was also observed that the respondent neither filed a counter nor evidence against the appeal. Further, the respondent did not appear when he was given an opportunity of being heard. On the other hand, written submissions were submitted which were not enough to prove the non-existence of prima facie case. Considering these factors, the Tribunal stayed the operation of patent.

Can the operation of a patent be suspended?
In the instant case, the Appellate Board rejected the contention that it did not have the powers to suspend the patent. The provisions of section 95 of the Trade marks Act, 1999 have been made applicable in discharge of functions by the Appellate Board by virtue of section 117B of the Patents Act, 1970. The Appellate Board held that the conditions (a) and (b) enumerated therein [i.e serving copies of the appeal on the party against whom such appeal has been made and giving an opportunity of being heard] had been satisfied in this case. There is no condition in the statute pertaining to the filing of counter and evidence by the party against whom such an appeal is made. The Tribunal accepted the argument of the petitioner that in a strong prima facie case of invalidity of a trademark, the Tribunal had earlier interfered and suspended the rights in the registered mark [ Smt. Raj Rani Agrawal Proprietor of Bios Laboratory v. M/s. Parul Homeo Laboratory (P) Ltd. ORA/4/2008/TM/DEL]. Following this stream of reasoning, the Board dismissed the contention of the respondent that the interim order for stay of patent could not be issued till the filing of counter by the respondent.

The stream of reasoning employed in this Order lacks coherence and logic. A provision has to be interpreted in consonance with its text and context. If text is the texture, context is what gives it the colour. Neither can be ignored. The best interpretation is that which modulates the textual interpretation to its context. A statute has to be interpreted by exploring the intention of the legislature through the most natural and probable signs which are the words, the context, the subject matter, the effects and consequences and the spirit and reason of the law [District Mining Officer and Ors. v. Tata Iron and Steel Co. and Anr. (2001)7SCC358 & The Reserve Bank of India vs. Pearless General Finance and Investment Co. (1987)2SCR1]. In the instant case, the tribunal interpreted the provision without paying heed to its context. The Order has the effect of suspending the rights of patent holder in toto during the stated period. A bare perusal of the Order gives an impression that the Tribunal can exercise any power under Section 95 of Trade marks Act provided the conditions therein are met. This is an interpretation which does not consider the context for the following reasons:

• Firstly, section 53 which lays down the term of patent to be twenty years from the date of filing of application for patent, does not offer any other method for calculating the term of a patent. Consider a situation where a patent is suspended for a year. Will this loss of one year be considered while calculating the term of a patent? Further, does suspension of a patent mean that the patent can be infringed with absolute impunity during the tenure of suspension? Since the Patents Act is silent on these germane issues, it is difficult to impute IPAB with the power to stay the operation of patent.

• Secondly, the tribunal referred to some of its earlier Orders suspending the rights in the registered mark. Assuming the legal validity of the referred Orders, the drawn parallel is far-fetched. While the term of a trademark is indefinite (subject to renewal of registration of the mark), the term of a patent is finite (twenty years). In other words, the suspension of operation has an altogether different effect in case of patents.

• Thirdly, the interim stay of operation of a registered patent amounts to temporary revocation of patent. It has the effect of granting the prayer for final relief of revocation of patent under Section 64 of Patents Act. Interestingly, the Andhra Pradesh High Court in Hyderabad Chemical Supplies Limited v. United Phosphorus Limited and Anr (2006(6)ALT 515), on a similar prayer, declined to grant the prayer for interim suspension of patent. The Court observed that such an interim order has the effect of granting the final relief. The Court based its reasoning on the principle that such interim orders can be made only in “exceptional circumstances”. The Court, in the instant case, declined to bring in the prayer for interim suspension of patent under “exceptional circumstances”. The Court, however, did not define exceptional circumstances. The Tribunal did not at all refer to this jurisprudence in the instant dispute.

To conclude,
The Order sets a dangerous precedent. It is a different matter altogether that the patent in dispute is highly controversial and dubious. While some jurisdictions calculate the term of patent from the date of granting of patent, the Patents Act calculates the term of patent from the date of filing of patent application which takes on an average at least a year before the grant of patent. Considering this, allowing suspension of patents will result in harming the interests of the patent holders.