Patent Trademark

Specialised IP Courts (Part II): Interrogating the IPAB


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Specialised courts are contentious creatures! The ICTSD is soon coming up with a series of papers on this and I’m doing the Indian section on this for them. I thought it timely to therefore put out some thoughts on these issues (If you’re interested in reviewing a draft version of the paper, let me know and I can email to you). So here goes:

Specialised courts are often touted as offering numerous advantages over regular courts, including speedier dispute resolution, improved decision making and greater consistency and uniformity in jurisprudence. In an earlier post, I extracted potent portions from two pieces that tore into this “specialized” IP court business. And noted that these extracts were not simply to entertain you, but to help generate a discussion around the optimality or otherwise of IP courts for India.

The latest entrant to this specialised bandwagon is the Commercial Courts Act, which passed Parliament in January year, but with retrospective effect from October of last year. For those looking for a quick overview of what these courts will likely do for IP disputes, see this well articulated piece by Prathiba Singh here.

We’d also blogged on these courts earlier, albeit in the context of challenges to transfer of IP cases to district courts (in the wake of a conflict between the Commercial Courts Ordinance and Delhi High Court Amendments Act). But first, for those who came in late (in true phantom style), a bit of background on how India has fared with specialized IP courts so far!

The IPAB

More than a decade ago, we had a strange beast take birth, namely the Intellectual Property Appellate Board (IPAB). Established vide the 1999 amendments to India’s Trademark Act, this judicial body was tasked with two key functions:

1 Deciding appeals from the Indian Patent and Trademark Office.
2 Determining the validity or otherwise of granted patents and trademarks.

While the IPAB is similar in some respects to other specialised courts such as the Court of Appeals for the Federal Circuit in the United States, or the Patents County Court in the United Kingdom, it also differs in important particulars. Illustratively, the IPAB has a fairly limited jurisdictional role and cannot adjudicate upon the most contentious of all IP disputes, namely IP infringement.

Constitutional Competence of the IPAB

Unfortunately, despite the best of intentions (or is there a doubt here as well?), the IPAB has been mired in one controversy after another, leading finally to a constitutional challenge mounted by yours truly in 2010 (along with a stellar team comprising Prashant Reddy, Sai Vinod etc and led by leading lawyers Arvind Datar, Vineet Subramani and Ananth Padmanabhan) alleging that the IPAB was on a very shaky constitutional wicket.

That it was not sufficiently independent of the government, the qualifications for the appointment of judicial members on the board were contrary to the law of the land, and that irregular appointments were the norm, rather than the exception.

Last year, the court agreed with us and declared key provisions governing the constitution of the IPAB as unconstitutional, particularly provisions relating to qualifications of those appointed to adjudicate on the tribunal, and provisions granting pre-eminence to the government in the selection process.

The court noted that tribunals that have taken over erstwhile functions of the high court (such as the IPAB) need to be vested with the same judicial gravitas as a regular high court, particularly in terms of the eligibility of adjudicators and its independence from the Executive. To this end, the court endorsed an earlier Supreme Court precedent that had laid down in clear terms that [Union of India v. R Gandhi, 2010 (5) SCALE 514]:

“The issue is not whether judicial functions can be transferred from courts to Tribunals. The issue is whether judicial functions can be transferred to Tribunals manned by persons who are not suitable or qualified or competent to discharge such judicial powers or whose independence is suspect. We have already held that the Legislature has the competence to transfer any particular jurisdiction from courts to Tribunals provided it is understood that the Tribunals exercise judicial power and the persons who are appointed as President/Chairperson/Members are of a standard which is reasonably approximate to the standards of main stream Judicial functioning. On the other hand, if a Tribunal is packed with members who are drawn from the civil services and who continue to be employees of different Ministries or Government Departments by maintaining lien over their respective posts, it would amount to transferring judicial functions to the executive which would go against the doctrine of separation of power and independence of judiciary.”

In a rather rare occurence, the court also reworked their earlier order to account for the patent provisions (and eligibility of technical members in this regard) as well.

The government unsuccessfully appealed this decision to the Indian Supreme Court (the highest court in the land). While refusing to admit the appeal, the apex court noted that the law was fairly well settled and there was no reason to interfere with the decision of the Madras High Court. (See Union of India v. Shamnad Basheer and Ors., SLP No. 18142/2015, Supreme Court of India (27 July 2015).

The Madras high court decision makes it clear that “technical” members with alleged technical expertise cannot write the “decisions” handed down by this tribunal. Since the decision, no appointment has been made. As to what happens to previous decisions of the tribunal, my understanding is that we have soon called the doctrine of prospective overruling in our constitutional jurisprudence (or something similar) that legitimates such decisions, even if it later turns out that the body passing such decisions lacked the requisite constitutional competence. I’m not absolutely certain of the bounds of this legal doctrine and the extent to which it applies on all fours to the issue at hand (the legitimacy of prior IPAB decisions): so will wait to hear from those more constitutionally competent than I am. (I have to thank Mathews George for pointing me to this doctrine).

Given that the IPAB has been stuck in this constitutional crisis and characterised thus far by a woeful inadequacy in availability of resources/ personnel (an aspect that was strikingly highlighted by the inimitable Justice Sridevan in her report here), it is difficult to subject the performance of the IPAB to a fair and rigorous assessment. However, to the extent that we have some data, let’s take a shot, shall we?

Measuring Merit of the IPAB: Pendency Rates

One of the main reasons touted for the creation of the IPAB was the preposterous pendency rates at the high courts. Given the urgency of IP disputes and the commercial stakes involved, it was felt that these disputes ought to be subject to speedier adjudication at the hands of a specialist forum.

However, a perusal of the pendency rates at the IPAB demonstrates that it has fared no better than high courts on this count; rather it may have fared worse. The average overall pendency rate of the IPAB between the years 2005 and 2012 was 50.53 per cent, whereas the pendency rate at the various high courts was a little over 10 per cent. Put another way, while the disposal rate of the IPAB was hardly 50 per cent, the disposal rate of the high courts during the same period was almost 90 per cent (Sources:

  1. The IPAB pendency data mentioned above was accessed through a Right to Information (RTI) application C-30016/4/2005-IPAB/1865, dated 25 Feb. 2015, filed by me under the RTI Act. The pendency rate of patent cases alone (2005–12) is 68.01% and that of trademark cases alone (2005–12) is 47.94%.
  2. For High Court pendency rates, see Supreme Court News 1.1 (2006) to 8.3 (2013), as cited in this terrific report by Alok Prasanna and Ketan Paul from Vidhi on the IPAB.

However, while making this comparison, the following factors must be borne in mind:

1. The high court figures for pendency/disposal comprise all cases, including civil and criminal cases. The IPAB figures, however, capture only with those IP cases over which the IPAB possesses jurisdiction. An ideal comparison ought to have therefore been between the rate of disposal of IP disputes by high courts, and that of the IPAB. One would expect a patent case to take longer to resolve than a regular civil dispute in the high court, particularly since judges are often likely to lack the technical expertise to appreciate patent issues as swiftly as they do a regular property or family dispute.

2 The pendency figures do not account for the overall judicial strength of the two fora, as also the differences in access to state of the art infrastructure and other resources such as support staff (Justice Sridevan’s report demonstrates the pathetic state of play of IPAB infrastructure/resources)

Institutional Bias of the IPAB

A number of scholars have cautioned against the development of an “institutional bias” by specialised courts and the propensity to political and economic capture, particularly by repeat players (IP owners) who bring frequent lawsuits before the specialist body. However, till date, there is no empirical evidence supporting this assumption. In fact, prominent US IP academics suggest that specialist IP courts will, over time, be less likely to rule in favour of patentees. (See Mark A. Lemley, Su Li and Jennifer M. Urban, ‘Does Familiarity Breed Contempt among Judges Deciding Patent Cases?’, Stanford Law Review 66 (May 2014), who conclude their paper by noting that: “As judges gain experience with patent cases, they are less likely to rule for patentees on infringement…..This…suggests that specialised patent trial courts may benefit accused infringers over patentees.”)

This appears to be the position in India as well, where an empirical study of the various IPAB decisions (particularly around patent validity) by me along with my research associates (Shruthi Anand, Gauri Pillai and Ankita Parasar, all students at WB NUJS) reveal that the vast majority of decisions went against the patentee i.e. 83.3 % of challenged patents the IPAB were invalidated. This certainly dispels any notion of undue bias towards IP owners.

However, an important qualification bears mention here. The notion of capture rests to a large extent on the assumption that a greater number of victories in favour of IP owners translates to the institution of more cases before the tribunal, thereby increasing its revenues and overall power/influence. Since the IPAB has no jurisdiction to decide IP infringement law suits, this assumption does not hold true for the IPAB; consequently, there is less likelihood of an institutional bias or skewing in favour of IP owners.

However, it is possible that the IPAB suffers another kind of bias in favour of the government. For, a majority of the disputes entertained by the IPAB are between the government on one side, and the IP owner/applicant on the other. Given the influence of the government in the constitution and functioning of the IPAB, one might suspect some skewing in favour of the government; however this needs to be empirically tested. The undue influence of the government in the functioning of the IPAB was more than amply highlighted by us through the PIL filed before the Madras High Court, discussed earlier.

Our next post will discuss the Commercial Courts Act in detail and its implications for IP disputes and the optimality (or otherwise) of the specialisation that it seeks to foster. So watch this space for more!

ps: image from here.

Shamnad Basheer

Shamnad Basheer

Prof (Dr) Shamnad Basheer founded SpicyIP in 2005. He is currently the Honorary Research Chair of IP Law at Nirma University and a visiting professor of law at the National Law School (NLS), Bangalore. He is also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof Amartya Sen. Professional History: After graduating from the NLS, Bangalore Professor Basheer joinedAnand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Prof Basheer has published widely and his articles have won awards, including those instituted by ATRIP and the Stanford Technology Law Review. He is consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also serves on several government committees.

4 comments.

  1. Avatarr k jain

    Respected Dr. Basheer,
    Read your article with interest. This is in series with your article earlier where you brought out excellent proses from legends in the field. While the tenor of both the articles signify your inherent discomfort towards specialized courts, but your arguments don’t really fortify your case. In fact , differently interpreted they built up a scenario which is completely different what you are envisaging.
    Please refer to my comment for the previous article. For this article in which you have evaluated IPAB, I make the following submissions:
    The IPAB was created with a limited mandate to test the validity of patents and other extraneous matters related to The Patent Act except for infringement. And in accordance with the mandate it was assigned the judicial powers which were commensurate to fufil its objectives. The thought behind this was that the High court when deciding on infringement cases in which the validity of the payment is the first line of challenge, will have the IPAB as a subordinate quasi judicial body saving it from some burden especially for cases which have come through IPAB. So the purpose of IPAB creation is note worthy.
    Your next argument is regarding the presiding officers who may come under the influence of vested interests. Sir, you yourself have taken lead in this by filing the cases and forcing the authorities to be watchful when appointing the presiding officers. But can not so worthy be also appointed in judiciary also. There are umpteen examples of unworthy conduct of presiding officers consequent to which the debate of transparency has ignited. Does the executive not making efforts to have a role. So it is only watchfulness and initiative of the people which will save the institutions no matter what the form.
    Regarding the other points of pendency, institutional bias and control of cause list of IPAB by vested interests, you have yourself pointed out that IPAB has not been a less worthy.
    IPAB is surely not a contentious creature, but certainly a convoluted picture is not doing justice to them.
    R K Jain
    Patent Agent

    Reply
    1. Shamnad BasheerShamnad Basheer Post author

      Thank you Dr Jain. Wonderful to engage with you again. Very thoughtful comments. I think you’re jumped to conclusions rather prematurely. Yes I do have issues with the IPAB –both on the constitutionality side as well as on policy more generally. And we need to keep these separate. Merely stipulating that the Act provides for them is neither here nor there. Are they desirable from a policy perspective? I’m not sure they are, given the current Indian context and constraint. We’d much rather have specialised benches at various high courts, a solution that I’m coming to in future posts that will be part of this series. so please do hold your horses till then. Thanks!

      Reply
      1. Avatarr k jain

        Respected Dr. Basheer,
        Thanks for your comments. Your contribution to the patent field is immense and is most appreciated. It is intellectually stimulating to read your comments. I learn a lot from you and hope that with your encouragement I will strive to make spicy Ip more fun. I really look forward to your posts and will surely put on hold my horses till then.
        Sir, I will like to send you a copy of my latest book (third book in series for patents) “Methods of Patent valuation and Royalty calculation” published through Universal Publication, if you allow me. It will be a pleasure to have your comments on it and will be a valuable feedback which could be incorporated in my next initiative.
        Also sir, I am only a “Mr. “not a “Dr.”, A small fry in comparison to legends like you.
        With warm regards
        Mr. R.K.Jain
        Patent Agent

        Reply
        1. Shamnad BasheerShamnad Basheer Post author

          Thank you Dr Jain for your kind words. I would love to read your book. Can you email me and I can send you my complete address? Thanks.

          Reply

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