Spicy IP Fellowship 2016-17: Indian Patent Office is not a Scientific and Technical Organisation?

In this post Vasundhara Majithia, our Spicy IP Fellowship applicant discusses the need to  recognise the Indian Patent Office as a scientific and technical organisation in light of the  Ministry of Finance’s refusal to do so .  This is Vasundhara’s first submission for the fellowship.

Prime Minister Narendra Modi’s Make in India programme is set to face yet another hurdle. While the government is trying to encourage foreign companies to manufacture their products in India and invest in the country, delays in granting patents threaten to undermine the entire campaign.

According to an Indiaspend study of 68,000 patents granted over the past 10 years, a patent application takes on average five to six years to get approved by the Indian Patent office as compared to three years in the US and UK. As of 2015, around 2.5 lakh patent applications are pending in India. This poses a serious problem as  delay in getting a patent means a delay in commercialization of the product and consequently a delay in entry of companies into the Indian market.

Reasons for pendency

The primary reason for this delay is the huge attrition rate in the Indian Patent Office. This has led to an increased workload on the Indian Patent office as compared to its US or UK counterparts. A major reason for this lack of examiners is that the increase in the number of examiners has not been proportionate to the rise in the number of patent applications. Further the Patent Office has consistently lost its qualified scientists and engineers, to the private sector which offers better salaries and more scope for career advancement.

Since the Patent Office has very little sanctioned strength in the top categories of posts, most examiners spend their entire lives with hardly any scope of even a single promotion. This obviously leads to a lack of motivation amongst the officers.

The Nitto Denko Case

The issue of patent pendency was addressed by the Delhi High Court following the two writ petitions filed in 2013 by Nitto Denko, a Japanese company calling to attention the inordinate delays of the Indian Patent office.  We have blogged about the Nitto Denko case previously here, here and here. The Government appointed a committee to look into the matter and specifically to come up with a programme for time-bound disposal of the pending patent applications and to suggest ways to ensure that fresh applications are processed expeditiously. The Court directed the Government to consider additional outlay for the creation of further posts of examiners and expedite the creation of posts sought within a period of 9 months.

Importantly, the Court also directed that efforts should be made to ensure that the Flexible Complementing Scheme (FCS) is implemented at the earliest in consultation with other concerned departments in the Indian Patent Office in order to resolve the issue of attrition.

Flexible Complementing Scheme (FCS)

The examiners at the Patent Office have long been demanding that the Patent Office be deemed a Scientific and Technical (S&T) Organization. We have covered this before on the blog here and here. However, the Ministry of Finance has been rejecting this proposal repeatedly. This is relevant because scientists who fall within the ‘A’ group of scientists of such organizations are eligible for the FCS scheme. The FCS is an in-situ promotion scheme for scientists for which the criteria is proven merit and records of research. It is extended only to departments which are involved in creating new scientific knowledge or, innovative engineering, technical or medical technique or which are predominantly involved in professional research and development and/or application of scientific knowledge. If patent examiners are also included under this scheme it would bring their salaries at par with the 7th Pay Commission standards and provide them with more opportunities for promotions and career growth.

The rejection by the Ministry of Finance is primarily based on the ground that the Patent Office is only concerned with administering of the Patent Act 1970 and Patent Rules 1972. They contend that examiners only carry out the administrative job of registering patents, industrial designs rather than carrying out any research and development activity (R&D). They further contend that examiners of the Patent Office do not perform any original research; rather, they register patents after consulting experts in the relevant field. Thus, they cannot be compared with scientists who carry out original R&D. The Ministry also contended that the principal issue is not if there are scientists in an organization or not but if the organization was a scientific organization and whether all technologists could be called scientists. It was felt that if all technologists are called Scientists, then Engineers in CPWD and Railways may also require similar treatment.

This decision is clearly appalling. The Patent Office clearly does not carry out purely administrative work; rather it is primarily involved in the application of scientific knowledge in order to grant patents. Thus, it falls within the criterion laid down for a scientific and technical organization. Further a patent examiner is required to possess a Master’s degree in Chemistry or Bachelor’s degree in Engineering/Technology/Medicine. The educational qualification standard is the same as that required for other scientists under the FCS. Declaring the Patent Office as a scientific and technical organization would have gone a long way in incentivizing these jobs, providing better salaries and scope for professional growth.

Next Steps

In January, earlier this year, Department of Industrial Policy and Promotion (DIPP) Secretary Amitabh Kant claimed that India will reduce its massive backlog of patent patency in coming 18 months and will bring down to Japan and USA’s levels. Kant said that around one thousand patent examiners have been hired and the work has also been outsourced to the IITs. Further, the Ministry has proposed amendments to the existing Patent Rules 1972. The government’s proposed amendments allow for an “expedited examination” under certain circumstances such as when the invention is already being manufactured in India, or has committed to manufacturing in India within two years from the grant of patent.

Despite the fact that the government’s efforts are commendable to some extent, the changes proposed do not really address the real issue. The focus of the government must shift from clearing the present backlog to long term improvements such as hiring highly qualified examiners on a permanent basis and incentivizing jobs and promotions so as to retain this talent. Retaining these new employees will be nearly impossible for the Patent Office if it does not provide them with more room for growth. The Patent Office must have a sound HR policy providing for more performance-based incentives, reduced workload per examiner and increased salaries. Treating the examiners of the Patent Office at par with other meritorious scientists under the FCS scheme will enhance their motivation levels and help retain their employees. It will also attract the best talent and prevent poaching of these scientists by the private sector. This in turn will improve the quality and quantity of the examination procedure and help tremendously in clearing the massive backlog. It will also prevent the creation of such a backlog in the future.

Thus, the DIPP and the Ministry of Finance must comply with the decision in Nitto Denko and make the FCS Scheme applicable to Patent examiners. The delays in the Patent Office shall reduce, and the ease of doing business in India will also improve tremendously. Only then will “Make in India” be truly successful.

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