Last week, we looked into how the proposed decriminalization bill affects copyrights, trademarks and geographical indications. Let’s now look into how it will affect patents, and the larger consequences of the law.
The Patents Act in India serves a more holistic role in economic development and progress. The Act aims to prevent the monopoly of large patent holders by publishing the method of working of the invention as well as showing that it serves a public purpose.
As part of this, there is a requirement is that the patent must be working in India, with proof submitted for the same in accordance with Form 27. It is important that companies answer the questions regarding the extent of working of the patents in India and explain reasons for not working. Patents are subject to compulsory licensing after three years of grant, and only under certain conditions such as unavailability of the item at reasonable costs and to reasonable demand.
This requirement is called the local working requirement which is in consonance with the TRIPS agreement. This allows life-saving drugs to be compulsorily licensed at reasonable royalty rates and prevent monopoly. In cases where the drugs are imported and such importation is hindering the working of the patent in the domestic market or causes a shortage of patented drugs then compulsory licensing can be demanded automatically.
This Bill plays a crucial role because if the working requirements are not fulfilled the beneficial goal of patents is diluted. The Bill proposes that, instead of increasing the strictness of compliance, the penalty be reduced for non-compliance, which in turn can dilute compulsory licensing. Reducing criminal penalties for non-compliance with patent working requirements may have an overall negative impact on the economic progress of the country.
The bill also proposes an increase in the fine prescribed for false patent markings i.e. falsely marking products as ‘patented’ or ‘patent pending’ under Section 120 (from INR one lakh to INR 10 lakhs). This is to curb deceptive patents from being circulated and deceiving innocent consumers.
The Controller has been granted wide powers to impose penalties for any contravention or default under the act. The reason for increasing the adjudicatory powers of the Controller has not been defined however similar powers have also been granted to the Registrar of Trademarks and Geographical Indicators.
Has the Bill Missed its Mark in Respect of the IP laws?
The Bill had an opportunity to rectify several mistakes. In the context of Copyright, the offence of infringement has not been decriminalized. Only one section granting criminal punishment has been removed. The Bill should have differentiated between instances of piracy and infringement. Piracy includes infringement but not vice-versa. Criminalisation should be limited only to mass piracy and not routine infringement. The various conflicting decision regarding copyright being made cognizable or non-cognizable could have been settled.
The Kerala and Assam State High Courts believe that making copyright infringement a cognizable offence will tackle piracy, while High Courts of Andhra Pradesh, Telangana are anxious that this can stifle creativity, innovation and access to information. The Bill could have corrected the stance that every act of copyright infringement is not piracy and allowed the benefits of fair use to prevail in certain cases.
Gross error in patents has been diluting the requirement of patents working locally and reducing the penalty for contravention. Diluting the criminal penalties is antithetical to the purpose of patent laws, especially in a country like India where patents serve a higher role in economic growth and granting access to generic versions of highly costly patented inventions, especially in the pharma sector.
On the points of patents, there is a similarity between the USA and the current Bill where India like its counterpart makes false patent marking a criminal offence: If any person falsely represents that any article sold by him is patented in India or is the subject of an application for a patent in India, he shall be punishable with fine which may extend to five hundred rupees. Unlike the USA India does not avail of civil remedies for such offences. The Bill could have instead increased the penalty amount allowed for civil remedies in the form of damages.
Trademarks and GI remain comparatively better planned except for removing sections 103 and 44 of the Acts respectively.
The Bill seems to have missed the target or not made much difference in most areas of the four IP laws discussed.
Author: Dipanwita Chakraborty, Associate Trainee at PA Legal.
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