As our readers may remember the DIPP had recently released a discussion paper on reforming the organizational structure of the Patents & Trademarks office. The deadline for replying to this paper is the 30th of November. In the meanwhile, to get the debate rolling on this blog, we have for our readers this incisive guest post, from Mr. R. Parthasarathy, Senior Partner and Adarsh Ramanujan of Lakshmi Kumaran & Sridharan, on the issues raised by the DIPP in its discussion paper.
Some thoughts on the DIPP discussion paper
by R. Parthasarathy & Adarsh Ramanujan of L&S
In the recently issued discussion paper, the Department of Industrial Policy and Promotion (DIPP) has sought comments and views on possible ways of strengthening and restructuring the Intellectual Property (IP) Office in India – the office of the Controller General of Patents Design Trademarks and Geographical Indications (CGPDTM). The discussion paper identifies the purpose of this exercise as making the IP Office more efficient, responsive and effective in its operations, especially in the light of India gearing up to become an ISA / IPEA (the final version of the draft rules enabling this function are yet to be notified) as well as the increased trade marks filings expected under the Madrid Protocol. Towards this objective, the discussion paper has sought suggestions on about 14 questions and also suggests a few ideas, including a categorical bifurcation between the Registry for Trademarks (TM) and Geographical Indications (GI) on the one hand and an office of the Controller of Patents and Designs on the other.[1]
As readers may understand, this is a vast topic and it may not possible to comprehensively cover the entire paper. This short article will instead focus on one major issue that has been highlighted in the paper – making the IP Office in India an “autonomous agency of the government”.
Integrated IP Body:
While the paper suggests a bifurcation in the relevant IPRs at the Controller-General level, the paper suggests the opposite, one step above – an autonomous agency that administers all IP related legislations, including those relating to patents, copyrights, trademarks, designs, plant variety rights, integrated circuits and biological diversity. Presently, whereas the legislation dealing with patents, designs, TM and GI are integrally being administered under the Ministry of Commerce, other legislations are being administered separately – plant variety protection is under the Department of Agriculture Research and Education, copyright is administered by the Ministry of Human Resources and Development, biological diversity is administered under the Ministry of Environment & Forests (MoE&F) and integrated circuits (not substantially operational) by the Ministry of Information Technology.
But before getting into the nuances involved, it is important to understand whether there is any need for further integration as noted by the Discussion Paper. The discussion paper throws little light on the need or policy reasons for requiring such integration, let alone under an autonomous body, apart from a vague statement as to “smooth functioning”. At present, there does not appear to be any significant obstacles in some of the legislations being administered by different ministries. Integrated administration makes sense only if the legislations involved require a balancing act. The objectives and policy concerns of some of these legislations are completely distinct. For instance, the Biological Diversity Act, 2002 has been enacted with the intent of conserving biological diversity and ensuring fair and equitable sharing of benefits derived from the utilization of Indian genetic resources. The first objective is obviously more suited to be administered by the MoE&F. Even if we were to consider the benefit sharing requirement as being in the nature of royalty payments to “benefit claimers”, the legislation is intended to create a regulatory set-up on the access and further utilization of Indian biological resources. This is completely unlike any traditional IP legislation, say, the Patents Act, 1970, which is more concerned with the process for the grant, invalidity and infringement of patent rights. A similar argument could be made even for the legislation on plant variety protection and in fact, the distinct considerations in the granting plant variety protection necessitated the creation of a completely distinct legal regime.
Admittedly, many of these legislations may contain provisions that are overlapping in nature, which is probably true for an innumerable set of legislations in India. Therefore, this alone cannot be a reason to integrate the administration of all IP legislations in one department or ministry. It is unclear as to how, in day-to-day operations, such integrated administration under one body would provide any significant advantage or efficiency.
The paper, however, goes one step further and suggests autonomy to such an integrated IP body. Being meant only for “discussion” purposes, the paper clarifies very little on what exactly is meant by creating an autonomous body. However, the paper does refer to “examples of autonomous statutory bodies” such as the SEBI, the IRDA etc. and one could draw an inference from such illustrations that what the discussions paper intends is something beyond just ensuring that all IP legislations are being administered under one department or ministry.[2] As an alternative, the paper suggests that the office of the CGPDTM be given “complete financial and administrative autonomy”
At present, the revenues or fee collected by the IP Office are ultimately pooled into the Consolidated Fund of India and therefore, its use and distribution occurs after discussions in the Parliament. Financial autonomy to the IP Office would entail that the fees collected by the IP office remains in the custody of the IP Office and be appropriated by the IP Office itself. Such a scheme is not alien to our Indian legal system and to cite a recent example, the Competition Commission of India enjoys such financial autonomy, as per Sections 51-53 of the Competition Act, 2002. The Competition Act, 2002 envisages the creation of a “Competition Fund”, into which all Government grants, fees received and interest accrued therefrom are credited. In turn, the Competition Fund is applied for meeting the expenses of the Competition Commission. The scheme, for obvious reasons, also entails maintenance of accounts, filing of returns and auditing by the office of the CAG (Comptroller and Auditor General). Therefore, it is possible to amend the various IP legislations to a similar effect.
But the question remains as to whether such an exercise is actually needed in the context of the Indian IP Office. Perhaps the suggestion of an autonomous IP body is simply a trickle-down effect of the recent controversies surrounding the independence of the IPAB from the executive. The IPAB, many would realize, stands on a different footing from that of the office of the CGPDTM, considering that the IPAB has taken over the erstwhile functions of the High Court. Financial autonomy for the office of the CGPDTM is not a constitutional mandate, whether directly or impliedly under the prism of the “rule of law” (Article 14). At best, one could argue that such financial autonomy would reduce delays in the appropriation of funds for any unplanned expenditure. However, an important point is that a number of departments and offices working under the Central Government are in a similar position and may also generate surplus in terms of revenue. It is difficult to provide significant policy reasons that justify financial autonomy to the IP Office in particular and not extend similar autonomy to other departments or offices that generate surplus.
Presumably the administrative and financial autonomy suggested is intended towards providing more flexibility in the hiring, promotion and incentive schemes for examiners, in order to improve disposal rates. Similarly, outsourcing of examination – as a pilot project – to CSIR may also have prompted such a suggestion. The paper also suggests that greater autonomy (“increase efficiency and give flexibility in decision making”) be given to the IP Office by way of making minor amendments to the Rules, although the paper is vague as to which amendments in particular. The discussion paper had not brought out the why and how of the objectives sought to be achieved by such autonomy.
[1] Presently, all four legislations are being statutorily implemented through the office of the CGPDTM.
[2] Legally speaking, integrating them under one department / ministry is a simpler (comparatively) legal process since it only requires amendments to the Rules framed under Article 77(3) of the Constitution of India.
