Professional Negligence and Attorney Liability?

A recent case raises serious issues around patent attorneys and professional negligence, the biggest elephant in the room that not many have spoken about till date. To what extent should a patent attorney be liable for compromising the case of their clients? And what is the nature of legal liability? Also, to what extent is a client to blame for the fault of an attorney? Assuming professional negligence of the patent attorney were to be established, could the client argue this in its favour when seeking an extension of time or other remedy to resuscitate its lost patent. The facts are as below:

A Patent application No. 196/KOLNP/2003 was filed by Rubicon Research Pvt. Ltd, an Australian Company through their agent M/S. D.P. Ahuja & Co. The patent was granted and recorded in the register on 2nd March 2007 (Patent no. 202639). A Letters Patent, clearly indicating the timelines for payment of renewal fees, for the said patent was issued to D.P. Ahuja & Co. However, as alleged, D.P. Ahuja & Co did not make or inform the applicant of the requirement of making such payments within the time stipulated.

The 3rd year to 7th year renewal fees were to be paid by 2nd June 2007 as per S. 142(4) of the Indian Patent Act (i.e. three months from the date on which the patent is recorded in the register). In case the same was not paid, a further opportunity for making payments is provided for-  the section allows for a further extension of six months i.e. 2nd December 2007. Therefore, 9 months is the total time given to applicants for making payments.

However, if payments are not made within 9 months the patent lapses. Thereafter, S. 60 gives the patentee an opportunity to restore his patent within 18 months from the date the patent lapsed.

Despite this elaborate scheme, which the agent should have been aware of, there was no payment made and the applicant’s patent lapsed. Moreover, there was no application of restoration of the patent.

In 2012, Essenese Obhan, the applicant’s new Patent Agent, made an application for condonation of irregularity in not submitting an application for restoration and for non – payment of renewal fees. The Controller dismissed this application. It was held that timelines specifically provided for in the Act are mandatory and cannot be evaded, that the Letters Patent clearly laid down the timelines and that provisions of condonation of delay under the Limitation Act do not apply to the Controller.

 An argument was made stating that under Rule 137 of the Patent Rules the Controller can correct any irregularity if no detriment is caused to the interest of any person. However, it was held that this power can be exercised only in cases where there is no special provision contained in the Act to deal with irregularities. In the present case, since the Act itself prescribed timelines, the Controller was bound by them.

The applicant also argued that they were not informed by their agent about the requirement of paying fees within a particular time. Therefore, failure to pay renewal fees was unintentional and beyond the control of the applicant. The Controller cited Rule 135 and held that communication made to the agent is equivalent to the communication made to the applicant. Therefore, since the Letters Patent issued to the agent clearly stated the timelines, the same was deemed to have been communicated to the applicant.

It must be noted that under the Limitation Act, in certain circumstances, mistake by a lawyer is a good ground for condoning delay.  However, the Controller cited various authorities that held that S. 60 of the Act is ‘self contained’ in prescribing timelines and the Controller has no power to enlarge the given period by condoning delay.

Importantly, the applicant stated “It was further submitted by the applicant that the subject patent lapsed on account of M/s. D. P. Ahuja & Co. having failed to perform their duties towards the applicant by not informing them about any deadlines for payment of annuities or restoration.

The Controller observed “The grounds laid down in the Petition under Rule 137 as submitted by the learned agent, Mr. Essenese Obhan are based on the communication gap between the patentee and its the then authorized attorney.

This incident throws open several questions: Can this incident be reduced to a mere ‘communication gap’? Is this a private matter to be resolved between the agent and the applicant or does it have a bearing on the legal/IP profession as a whole? And a question raised by Prashant– there is no procedure to complain against an agent, so is there a need for a regulatory body? And what is the nature of legal liability, if professional negligence is established. Damages?

We have blogged about professional negligence by patent agents here and here.

(Thank you Shamnad sir and Prashant for your comments on the post)


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1 thought on “Professional Negligence and Attorney Liability?”

  1. It will be of interest to note that there is no patent attorney in the world who has not faced similar issues relating to Patent renewal. The fact remains that clients will blame anybody but themselves for such lapses and mishaps. It is also to be noted that for such reasons, 90 % of annuities/ renewals are now being handled by specialised renewal agencies.

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