[Part I] – New Performance metrics might be in place in the IPO!

While I was railing against the Indian Patent Office’s (IPO) Order 34/2016 in a previous post, the IPO might have silently put in place a more comprehensive point-based system to measure the performance of both Examiners and Controllers. This new Office Order (Office Order 537/2025 or OO 537/2025) overrides Order 34/2016 and takes effect from 09/05/2025. Unfortunately, this information was not made public, and I was railing at an order which might have been overruled and is not in effect. Thanks to an anonymous reader, we have access to a document which is allegedly the new office order (Office Order 537/2025) that has replaced Order 34/2016. As regular readers would know, Praharsh had previously filed for an RTI to acquire information about a committee that was formed to review Order 34/2016, but we were informed that the committee was declared defunct and Order 34/2016 was still active. But later, it was brought to our notice that the new OO 537/2025 has been put in place, overriding Order 34/2016. Since we do not have an official communication from the IPO that Order 34/2016 is overruled and that a new office order is in place, I am presuming, for the purposes of this post, that OO 537/2025 overrides 34/2016 and is the new order in effect for measuring the performance of Examiners and Controllers.

Looking at the Office Order: 

The OO 537/2025 has taken a point-based approach, wherein the entire workflow (as it relates to examination of patent applications) has been broken down into discrete tasks and points are assigned to each task. This was evident in the previous Order 34/2016 itself, yet the breakdown was rudimentary and basic. This is not the case with OO 537/2025, as it has gone into more detail and provides for points for each discrete task completed by the Examiner/Controller. 

Examiners and Controllers are required to score 100 points each every month, and their monthly performance will be calculated based on how much they score each month with the standard being 100 points. Unfortunately, the OO itself does not explain what consequences an examiner/controller might face if they do not meet the target. Previously, it has been discussed how show cause notices had been issued to patent officials by the IPO for “poor performance”, but had to be withdrawn because the Ministry of Commerce (MOC) believed it was not in accordance with procedure. Hence, this raises questions with regard to the ability of IPO to enforce these metrics. Yet this decision of the MOC is slightly puzzling, as CGPDTM under Section 73(3) is vested with the power of “superintendence and directions” over examiners and “other officials” appointed. I am not sure whether the opinion of the MOC is right or wrong, but the question of whether powers of “superintendence and directions” include issuance of show cause notices is a legal question that needs to be examined in detail.

Additional incentives (bonus points) have been put in to nudge patent officials to complete their task earlier than the prescribed time and a multiplication factor has also been added to account for application complexity (more claims -> more complexity -> hence more work)

The points system has also been provided for both examiners and controllers. Every completed task will earn you a certain set of points, with some tasks earning you more than others. For example, for an examiner, the examination of an expedited application will earn 8 points if you stick to the timeline; and ISA/IPEA applications will get you 10 points. 

The Point System for Examiners: 

The point system for the Examiner is pretty straightforward, with examination of new applications fetching you 6 points, while ISA and expedited examination applications fetching you more points. It is interesting to note that an ISA/IPEA application fetches you the same amount of points as sitting as Chairman of an Opposition board (at the post-grant stage). This is not new, Order 34/2016 previously had treated an ISA application as being equal to 3 First Examination reports (FERs), providing an incentive to process ISA applications more quickly if they are in your docket.

Post-Grant opposition either as a chairman or a member fetches one a lot of points (10 and 8 respectively). Likewise, examination of amendments, assisting the Controller with hearings, court matters and pre-grant opposition again fetches the Examiner 4 points each. 

Point system for Controllers: 

It’s at the Controller stage, the point system gets interesting. Take a look at the screenshots below:

Right off the bat, one can notice that Controllers can earn more points if they issue a reasoned order. But then the Controller can also get 6 points (2 for FER + 4 direct grant: doesn’t mention hearing or reasoned order). More points would be given if, post-hearing, through a reasoned order, the Controller disposes of the application. This makes one wonder, when the Controller goes for a direct grant without hearing, is he not required to issue a reasoned order?

Secondly, in the context of pre-grant opposition, decisions like no prima facie case without hearing, with hearing and final disposal post a positive determination at the prima facie level are assigned the same amount of points.
Likewise, in the context of orders which get appealed before the High Courts, there are additional points if the Controller, after the Court’s directions, passes a reasoned order. With special points of 20 given if the controller’s order is able to withstand an appeal before the High Court. 

Some thoughts on grants that might not need a reasoned order:

The first issue that will raise concerns and also eyebrows is the fact that the Controller can get 6 points if he disposes of an application by going for a grant without hearing and there seems to be no requirement to issue a reasoned order. It is interesting to note that if the Controller wishes to reject an application, he is required to give the option of hearing and then has to issue a reasoned order to reject the application. On the other hand, for grants the Controller has two options: either go for a direct grant without a hearing (reasoned order is not a requirement) or a hearing after which a reasoned order needs to be issued.

As a matter of principle, reasoned orders should be the norm and not the exception. This is true of orders which lead to a rejection and is more true of orders that lead to a grant. This is because the possibility of an appeal from a grant order is nil, which is not the case with a rejection order. Hence, adding more reason to issue a reasoned order in the context of grants. Yet, OO 537/2025 allows for a direct grant where reasoned order is not a requirement.

Now the question is, what could be the motivation to structure the metrics in this manner?

One can always argue that patentees as stakeholders in the patent system deserve a reasoned order when their patent is rejected. Thus, it could be because there is a desire to protect the interests of one stakeholder (patentees). But, there is also another stakeholder who needs a reasoned order when a patent is granted, it is the broader public against whom the patent(s) would be enforced.

A nuanced argument could be that it is not administratively feasible to issue a reasoned order in every instance, or the Patent Office and the broader public are better off being rationally ignorant, as most patent granted might not be enforced and it might be too costly examine all of them in a manner we might like. Yet there is no explanation why only one type of order does not require a reasoned order (direct grants) while the other one needs a reasoned order (rejections). By this logic, one can easily have an inverse system in place, where patents can be rejected without reasons, but to grant one needs a reasoned order. This can also reduce administrative burden, but with very different effects.

It is always possible that a certain number of patents granted might be economically significant (as a source of licensing fees) and with questionable validity. Additionally, patent rights are probabilistic in nature; hence, if patents proceed for grants without a reasoned order, there is a likelihood that it might lead to an increase in patents that are economically significant and with questionable validity. In a judicial system where interim injunctions play a major role in enforcement, would not a threat of litigation, an interim injunction, plus a patent grant, allow for a patentee to extract licensing fees he might not be entitled to? 

As stated earlier, reasoned order is a norm, not an exception. Hence, it automatically follows that the performance metric should also be wherever it can nudge the Controller to issue a reasoned order. Ideally, the performance metrics should clearly specify that even in the context of proceeding for a grant without a hearing, a reasoned order is necessary. A patent is not a natural right. It is something that is given only to encourage innovation and facilitate scientific progress.  A patent system which grants exclusion rights imposes costs on society (in return for alleged benefits of an increase in innovation) and it is improper for the IPO to impose these costs on the general public without clearly articulated reasons.

Another line of argument starts by thinking of Controllers performing two core functions (see here, here and here), namely

1. Supervisory role over the examiners under them and vetting their work.
2. Issuing Office Actions (OA) and orders based on the work/output produced by the examiner. The controller also might have to sink in additional work for issuing these OA and orders based on the work submitted to him/her by the examiner.

Now, when a controller is proceeding for grant without hearing (probably without an reasoned order), one can only presume that, based on the report submitted by the Examiner under Section 12 and application post issuance of FER is ready to proceed for grant or the amendments submitted were satisfactory (which again would be examined by an examiner) and hence the application was ready for grant. The controller can articulate his reasons in the form of an order post-hearing and net extra points or just get the 6 points for disposing of the application without a reasoned order, as it is not a requirement. Should not the grant of 6 points be contingent on the controller fulfilling both of these functions? Hence, why should 6 points be granted to Controllers for a direct grant where reasoned order is not a requirement? 
Now, one must move into the issue of what a “reasoned order” means in a concrete sense.

Devil is in the Details:

The definition of what constitutes a reasoned order is not set in stone and can vary based on the person you ask about. It would be interesting to know how the IPO is operationalising determining whether a particular order or set of orders issued by a controller is reasoned or not. For example, is a sample of orders or all the orders put out by a controller examined for its “reasonableness”? If examined, how is it examined and how many senior officials examine such orders? 

Thus, the key to making the metrics for incentive issuance of reasoned orders would depend on how it is operationalised. In the next part, I will discuss how a reasonableness checklist can assist us in concretely evaluating orders for their reasonableness and also assist controllers in issuing reasoned orders. After which, I will discuss how the OO treats PGOs and what the new OO means for patent quality.