New IP courts major step forward in China’s judicial reforms

In November and December 2014, China announced the long awaited establishment of three specialized IP courts in the Tier 1 cities of Beijing, Guangzhou and Shanghai. These courts are empowered to hear the following cases:

  • First instance civil and administrative cases related to patents, new plant varieties, layout design of integrated circuit, technological secrets and computer software;
  • First instance administrative cases involving copyright, trademark and unfair competition against administrative decisions of the State Council Department or above the county level departments (Beijing IP court will have exclusive jurisdiction over first instance appeals against decisions of the IP Administrative Authorities, such as the Patent Review Board and the TRAB);
  • First instance civil cases regarding the recognition of well-known trademarks and;
  • Second instance civil and administrative cases regarding copyright, trademark and unfair competition heard at first instance by district/primary courts.

The IP courts in Beijing and Shanghai will have jurisdiction over the cases in their respective cities, while Guangzhou IP court will have cross-regional jurisdiction over the entire Guangdong province.

IP professionals in China are generally upbeat about these welcome developments and see many potential advantages for IP owners flowing from the introduction of these new IP courts:

  • The establishment of specialist IP courts will help unify the trial standards and make rulings more consistent (For example, the rulings made in different IP tribunals in Beijing No.1 and No.2 Intermediate Courts were not always consistent previously).
  • This will bring more specialization and expertise. The judges will hear only IP cases and will therefore be specialized in handling IP disputes. The new system also allows for “technical investigators” (not judges or lawyers) in the IP courts. These technical investigators are employees of the court with scientific backgrounds, and their role is to assist the judges on the complicated technical issues, provide judges with professional advice and technical support. Undoubtedly, they will play an important role in patent and software copyright cases.
  • The “Decision on establishment of intellectual property courts in Beijing, Shanghai and Guangzhou” also states that IP courts could have cross-regional jurisdiction on IP cases in the upcoming 3 years. If this is implemented, the IP courts would function more independently, which will help curb the problem of local protectionism during the trial and in relation to the judgments of IP cases.

In light of the above, the establishment of specialized courts is a major step forward in relation to China’s judicial reforms. We still have much to look forward to, for instance the IP court’s jurisdiction to hear IP criminal cases, establishment of specialized IP appellate courts, etc. Also, there are still many problems and challenges for China’s IPR protection. China is still on the US 301 Watch List, and counterfeiting is still rampant. Nonetheless, from the continuous improvement of the IP legal system, we can see the Chinese government’s strong determination as well as its unremitting efforts in strengthening IPR protection, and we expect that the legal environment in China will continue to evolve in the right, positive direction in the next few years. We are after all only 5 years away from 2020, by which time China wishes to be in a position to say that it is a knowledge based economy, and no longer the world’s factory.

Ai-Leen Lim, CEO and Principal Counsel, AWA Asia

The Indian Jungle – an IP perspective, part 2

To foreign applicants filing a patent application in India takes place “at the IPO”, but in reality there is a choice of venue which is not trivial. The Indian patent office (IPO) is headquartered at Kolkata (formerly known as Calcutta) with branches in Chennai (formerly Madras), New Delhi and Mumbai (formerly Bombay). The office of the Controller General for Patents and Trademarks is located in Mumbai, a city regarded as the commercial capital of India (Delhi being the actual capital). The four branch offices are fully functional, so once an application is filed with a particular office it normally stays there throughout the life of the application. Foreign applicants can choose where to file, no matter which Indian associate they work with, but as most Indian patent agents are located in the Delhi area, most foreign applications are by default filed with the Delhi patent office, as this is most convenient for the patent agent.

There is presently a huge backlog of unexamined patent applications at the IPO which means that it takes ~4 years before an applicant receives the first examination report. Due to differences in staffing and workload the Mumbai office is however almost 2 years ahead of the Delhi office and 1 year ahead of the other two offices. Secondly, there is a difference in the way the Indian Patent Act and case law is followed at the four offices. Thus the Delhi and Chennai patent offices are unkindly referred to as “pharma application graveyards”. The Kolkatta office is regarded as the best place to file mechanical and automotive applications, whilst the Mumbai office is best equipped to handle pharma, biotech and computer science applications. Applicants who need a speedy prosecution should thus consider filing in Mumbai, especially if their application falls under the pharma, biotech and computer science areas.

Disclosure formalities

The IPO imposes very extensive disclosure (IDS) requirements. The IPO thus requires that information regarding any related foreign applications to be filed periodically with the IPO. The time period within which the applicant is required to notify the IPO regarding any related foreign application is currently six months. In addition the applicant is required, within six months of receipt of communication to that effect from the Controller, to furnish information relating to objections or rejections in respect of novelty and patentability during prosecution of corresponding applications elsewhere. Not furnishing this information is one of the grounds of invalidation of a patent. The disclosure requirements can be complied with by scheduling six-monthly filings in Form 3 with details of prosecution progress of related applications elsewhere.

Compulsory licensing

The compulsory licensing provisions according to Indian law are contingent on a determination: (a) that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or (b) that the patented invention is not available to the public at a reasonably affordable price, or (c) that the patented invention is not worked in the territory of India. In 2012 India granted its first compulsory license ever to the Indian pharmaceutical company NATCO against Bayer Corporation. Natco cited the high cost of treatment using the drug Nexavar (sorafenib tosylate) in their application. The above example is thus far the only compulsory license being granted.

Summary

India’s IP laws can be seen as a balancing act between on one hand a desire to fully comply with WTO/TRIPS requirements and on the other providing affordable medicines to its vast numbers of poor people. India however also offers exciting opportunities in the electronics, automotive and computer science areas where the quickly growing Indian middle class wants access to new, imported products which should be protected by patents, designs or trademarks. Please contact Awapatent if you need strategic advice on how to protect your IP rights in India!

Michael Bech Sommer, European Patent Attorney

The Indian Jungle – an IP perspective, part 1

Now these are the laws of the jungle, and many and mighty are they…” – Rudyard Kipling wrote these lines over 100 years ago in his “Law for the Wolves” from the famous Jungle Book. As IP practitioners we are constantly reminded of the complex nature of today’s Indian IP jungle and the many and mighty laws therein. This article will discuss some of the peculiarities of the Indian patent laws with the 1st part focusing mostly on differences in patenting practice between Europe and India. The differences in practice between the four Indian patent offices will be discussed in the 2nd part of the article, incl how clients should use this strategically.

India is a WTO member and has signed the TRIPS Agreement which provides patent protection for a period of 20 years from the filing date of the application. In addition to the typical requirements for novelty, inventive step and industrial application the subject matter of the invention must moreover not fall under one of the (many!) excluded classes from patentability, the best known being the Section 3(d) exception relevant to many pharmaceutically active compounds, which holds i.a. that a new form of a known substance is not an invention unless it shows “enhanced efficacy”.

Indian case law (Glivec case: Novartis vs. Union of India) has established that by “efficacy” is meant therapeutic efficacy which means that arguments for inventive step accepted under EP law like eg. higher stability of new crystalline compounds or salts will not be accepted as “enhanced efficacy” under Indian law. Improved bioavailability is on the other hand specifically mentioned in Glivec as not ruled out as an example of “enhanced efficacy”. Thus some hope still exists!

India does not permit claims to a method of medical treatment, nor claims presented in 1st or 2nd medical-use format. Claims to a pharmaceutical composition containing two or more active components may be permitted, provided 1) all the active components and their concentrations are specified in the claim and 2) support for an unexpected synergistic effect are provided in evidence of an enhanced efficacy of the claimed composition in comparison to known compositions. Such comparative data (ie not stand-alone) must be present in the application at filing in India.

India does not allow for utility model protection, but does allow for “Patents of Addition” which relate to improvements or developments of the invention to which the patent application or granted patent relates; the subject matter does not have to involve an inventive step over the parent patent or application, but must share the same inventive concept and have absolute novelty. The term of a Patent of Addition is the unexpired term of the main patent. No annuity is payable. Patents of addition should be considered as an interesting option for European clients.

Publication of the unexamined Indian application occurs at 18 months after filing; an examination for novelty etc. is subsequently conducted before a decision is made whether to grant the application. Typically this process takes 5-8 years. In contrast to European practice, pre-grant opposition may be filed at the IPO by any party, and without payment of fee. Post-grant opposition may be filed within 12 months of grant at the Indian courts but only by an “interested party”, and can be a very longwinded affair. The grounds for both pre- and post-grant opposition include i.a. the right to the invention.

Once granted, India has a working requirement: Every patentee and licensee has to furnish annual statements regarding the working of the patented invention on commercial scale in India. Importation does not count towards the working of the invention. Compulsory licensing may be granted to local Indian companies in case working requirements are not met.

In the second part of the article we will discuss some further peculiarities of the Indian patent system incl. options for patent office “forum shopping”, the extensive disclosure formalities and compulsory licensing issues.

Michael Bech Sommer, European Patent Attorney