Ministry of Finance Reiterates its Decision not to Grant Benefits of Flexible Complementing Scheme to Patent Office Employees

Few would disagree with the broad proposition that the success of the patent system is contingent upon a well-functioning patent office, manned by technically competent examiners and controllers.
To this end, two issues that have often been at the forefront of most discussions about the strategies that can be adopted to achieve this objective have been the need to recognize the patent office as a scientific and technical organization and, as a logical corollary, to make the modified flexible complementing scheme (MFCS) applicable to patent office employees.

As Prashant has noted, the most powerful rationale undergirding the argument that the scheme should be made applicable to patent office employees is that the MFCS can play a pivotal role in attracting the best talent to the patent office. Since engineers and science graduates have the liberty to choose one amongst multiple career paths, the argument goes, they are more likely to choose to work for a scientific organization whose employees are provided the benefits of the MFCS as opposed to the patent office whose employees are not.
Interestingly, the demand for the benefits of the MFCS to be extended to the patent office has gained momentum over the last few years, as Prashant notes in the above article.

The demand was first voiced by the Department of Science and Technology (DST) and Department of Personnel and Training (DoPT) in 2003. It was also reiterated by the National Knowledge Commission in its letter to the Prime Minister in 2007 and by the DIPP in the 11th 5-year plan.

As Anubha noted, the Delhi High Court in its judgment in the case of Nitto Denko versus Union of India directed the concerned stakeholders to make all possible efforts to introduce the MFCS in the patent office in consultation with the DoPT and DST as one of the strategies to meaningfully grapple with the problem of a high attrition rate.

A recent RTI reply filed by the Department of Expenditure in the Ministry of Finance, however, indicates that the Ministry continues to believe that the MFCS should not be made applicable to patent office employees. The reply contains a note dated 16.12.2016 in which the Ministry reiterated its stance.

The note begins by noting that the Ministry determined in February 2016 that it would not be advisable to change its stance on this issue, given that the nature of work that the patent office does has not undergone a material change in recent years.

It then takes note of the definition of a scientific organization given by the DST in the OM dated 10.9.2010 which defines such an organization as one whose employees are “involved in creating new scientific knowledge or innovative engineering, technological or medical techniques or which are predominantly involved in professional research and development work.”
After noting that the 7th Central Pay Commission observed in its report that the matter should be left to the discretion of the DIPP, the Ministry gives two reasons in support of its conclusion of not altering its stance on this issue.

First, it notes how the patent office, on the basis of the work that it does, cannot be characterized as a scientific and technical organization. Granting the patent office such a status and its members the benefits of the MFCS, the Ministry of Finance clarifies, will result in individuals in other similarly situated organizations claiming the same benefit.

Second, the Ministry notes that the administrative ministry has not been able to put forth any cogent and compelling reasons that would justify a change in the stance of the Finance Ministry. On this basis, it reaffirms its earlier position on this issue.

This decision of the Ministry of Finance is deeply problematic for at least 3 important reasons.

First, the ministry’s conclusion that the patent office does not possess the attributes of a scientific organization is founded upon the definition of such an organization extracted above. As Professor Basheer and Vasundhara have noted, while no one can cavil at the proposition that the patent office does not conduct scientific research, it is definitely involved in the application of scientific knowledge, inasmuch as it is tasked with the responsibility of determining if any invention meets the criteria for patentability delineated in the Patents Act. This being the case, in light of the fact that the patent office does meet one of the criteria for an invention to be patentable, this conclusion completely lacks any legal basis.

Second, while it is no doubt true that high rates of pendency of applications and attrition cannot, ipso facto, be a justification for changing the characterization of an organization, I would submit that it is unwise for the Ministry to completely lose sight of these factors while deciding what kind of career progression scheme should apply to employees in an organization that plays a central role in India’s scientific progress. Ergo, by granting its imprimatur to the status quo, the Ministry is tacitly endorsing the deeply flawed approach that has resulted in large-scale brain drain from the Patent Office and a significant deterioration in the quality of its work.

This brings me to my final point. In light of the fact that it may be difficult to make the MFCS applicable to the patent office in light of the unique functions that it performs, as Professor Basheer has argued, a sui generis career progression scheme must be developed for patent office employees akin to the schemes developed for the employees of the DRDO and Department of Atomic Energy. This would not only be in consonance with the recommendations of the 6th Central Pay Commission, but would also be the golden mean between the two extremes of not providing any meaningful prospects of expansion to patent office employees on the one hand and granting them the benefits of a scheme that was not designed for individuals in their position on the other.

PS: Readers interested in learning more about this issue may want to visit our resources page which documents the correspondence between all key stakeholders involved in this controversy under the ‘RTI Corner’ tab.