IPAB eases time limit to file patent appeals in Microsoft cases

The Intellectual Property Appellate Board (IPAB) has published its decision in two cases involving Microsoft Corporation (Orders 86 and 87 of 2015, March 27 2015). The issue for consideration was whether the three-month limitation period set out in Section 117A(4) of the Patents Act 1970 for filing an appeal before the IPAB challenging the controller’s decision should start to run from the date of the order or the date of receipt of the order.

In May and June 2014 the Indian Patent Office rejected two patent applications made by Microsoft. Section 117A(4) of the act provides that: “Every appeal shall be made within three months from the date of the decision, order or direction, as the case may be, of the Controller… or within such further time as the Appellate Board may, in accordance with the rules made by it allow.” There is usually a substantial time gap – sometimes weeks – between the controller signing the order and actual receipt of the order by the applicant. In the case at hand, the signed order communicating the rejection was received by the applicant's attorney two weeks after the date of the order. The applicant argued that it would be unfair to rule that the time limit should begin from the date of the order and not from the date when it was received by the attorneys because the three-month statutory limitation was curtailed due to delay caused by the late dispatch and delivery of the signed order, which is the basis for an appeal. Further, it is a condition of filing an appeal that the original impugned order be attached. This is critical for international applicants which have internal and external counsel who may need substantial time to evaluate whether to appeal against an order of rejection.

To date, the general practice before the IPAB had been that many applicants which filed appeals more than three months after the date of the order also filed separate petitions to condone the delay in filing the appeal where the delay was counted from the date of the order and where the appeal would have been within the time limit if the period had been calculated from the date of receipt of the order.

Microsoft argued that the cause of action to appeal under Section 117A arises only when the applicant becomes aware of the rejection, which happens on receipt of the order. It relied on a Supreme Court decision in which a similar question arose while dealing with a statute that also used the words “from the date of that order”. Microsoft relied on D Sai Baba v Bar Council of India ((2003) 6 SCC 186) in which the court held, among other things, that the term 'date of the order' in the statute necessarily means the date of communication of the order in matters where the aggrieved party wishes to challenge such order. Microsoft relied on various paragraphs of the decision in which the statute in question was Section 48AA of the Advocates Act 1961, which provides power to the Bar Council of India to review its own order "within sixty days of that order".

The Supreme Court held that the expression 'the date of that order' as used in Section 48AA had to be construed as meaning the date of communication or knowledge of the order to the petitioner. The court held that where the law provides a remedy to a person, the provision must be construed, in case of ambiguity, as to make it practical to avail of the remedy and to make the exercise of power conferred on the authority meaningful and effective. In particular, the court observed: “True, the process of interpretation cannot be utilized for implanting a heart into a dead provision; however, the power to construe a provision of law can always be so exercised as to give throb to a sinking heart.” Thus, the Supreme Court clearly held that if the "date of order" can be interpreted in a way as to make the remedy effective, such interpretation should be preferred.

It was thus pointed out that Section 117A(4) also provides a remedy to patent applicants and should not be interpreted to mean that the limitation to file an appeal would begin even before the order is communicated to the applicant. Such interpretation would render the remedy nugatory. Further, reliance was placed on Rule 5 of the IPAB (Patent Procedure Rules) 2010, which provides that every appeal submitted before the IPAB shall be accompanied with a certified copy of the impugned order. It was brought to the notice of the bench that the certified copy of the order could not be sought unless the order was effectively communicated to an applicant.

The IPAB bench – comprising Mr Justice KN Basha (the chairperson) and Mr DPS Parmar (the technical member) agreed with this argument and felt that Section 117A(4) should also be interpreted in the same way in order to mean that the “date of decision” of the controller should mean the date of communication of the order (ie, the date of receipt of the order). The bench noted that this conclusion would obviate the need to file a petition to support the delay in a large number of cases where the delay was caused by the Patent Office's delay in communicating the order. The cases at hand were two such examples: the filing of petitions supporting the delay only caused further delay in the numbering of appeals and final disposal.

However, the IPAB also cautioned that the burden will be on the appellant/applicant to provide proof of the date of receipt of the impugned order (eg, a postal receipt) in order to establish the effective date of receipt of the order.

The IPAB has streamlined the process of appeals for many foreign applicants, which must undertake several stages of evaluation before deciding whether to appeal against a rejection. Such evaluation may take a lot of time and the difference of one or two weeks during the three-month period will give significant relief to many applicants. Contrary to the so-called 'anti-foreign' stance, the IPAB has generally been conscious of the time required by foreign applicants to evaluate their options in case of rejection. This is clear from the decision in Cluett Peabody & Co Inc v Super Threads (India) (Order 24 of 2015, February 3 2015), in which the IPAB dealt with an issue of delay. Although it was a trademark matter, the court's observation is also relevant to patent cases:

"It is quite natural for a foreign company to have their consultation with their foreign Attorneys on receipt of the impugned order and thereafter to get the opinion and to have further discussion with Indian Attorneys for the decision to prefer an appeal. It is also quite reasonable for the petitioner to get the grounds drafted by the Indian Attorneys and for further deliberation with their Attorneys in their own country and during the said process, the delay of 12 days could have very well occurred.” (Paragraph 6.)

Therefore, the IPAB has not only upheld the rule of law, but has again silenced its critics on the perceived anti-foreign stance.

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