By Sanjay Raman Sinha
The Controller General of Patents, Designs and Trade Marks (CGPDTM) office is under a cloud. The law ministry has termed the orders passed by CGPDTM over the last two years as legally unenforceable, as they have been passed by outsourced employees. The Trade Marks Act, 1999, prohibits orders by outsourced employees; but apparently, the CGPDTM office chose to ignore this and has thereby risked hundreds of its patent and trademark related orders from being declared illegal.
The Department for Promotion of Industry and Internal Trade (DPIIT) had sought a legal opinion from the law ministry in the matter. In June this year, Additional Solicitor General Aishwarya Bhati had suggested cancellation of decisions made by the outsourced employees as they were not legally tenable. Later in August, the Calcutta High Court held that employing contractual workers for performing “quasi-judicial functions” in the patents and trademark office was unlawful.
Between March 2023 and March 2024, the CGPDTM had granted as many as 1 lakh patents, as per the ministry of commerce and industry figures. Many of the patents approved belonged to global IT companies such as Qualcomm Inc., Samsung Electronics, Huawei Technologies and Apple.
DPIIT had hired outsourced manpower through the Quality Council of India (QCI). However, QCI is an autonomous body, and doesn’t belong to the government. These outsourced employees granted patents and trademarks to companies in quasi-judicial orders. As per the legal advice to the government by Bhati, the order delivered by outsourced employees needed to be cancelled.
The issue was raked up in February this year when senior Congress leader Adhir Ranjan Chowdhury shot off a letter to the chief vigilance commissioner for investigating allegations of corruption in the office of the CGPDTM. In his missive, Chowdhury contended that rules and norms were jettisoned by the CGPDTM and pliable men were allowed to pass verdict on intellectual property rights (IPR) cases for financial considerations. It was also alleged that the technical mode of case allotment by IT-based auto allotment process of IPR cases had been given short shrift.
Some of these charges were substantiated recently when a committee set up by commerce and industry ministry indicted Professor Dr Unnat P Pandit, Controller General of Patents, Designs and Trademarks for “administrative lapses” in the purchase of 1,200 personal computers for offices all over India at an inflated cost of Rs 9,99,75,600. Rules demand that tenders above a certain cost need to be permitted by the commerce and industry minister. This was not adhered to.
CGPDTM is a key body under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry. It is responsible for administering laws relating to patents, trademarks, designs and geographical indications. It plays a quasi-judicial role in the examination and grant of intellectual property rights (IPR), which are vital for the protection of innovations and branding in a competitive global market.
The central legal issue here is the legality of orders passed by outsourced employees. According to Indian law, particularly the Trademarks Act, 1999, and the Patents Act, 1970, only government-appointed officials are authorised to pass orders related to the grant or refusal of intellectual property rights. These officials are vested with the authority to entertain applications, hear objections and give orders that have legal sanction. In short, they are courts in themselves.
On the other hand, the Quality Council of India (QCI), established in 1997, is an autonomous body under the commerce and industry ministry, tasked with setting benchmarks for quality and accreditation. However, its involvement in the hiring of employees for CGPDTM raises questions on the appropriateness of the decision to use the QCI as a hiring intermediary. The apparent reason may be manpower shortage; but employing outsourced non-government manpower for critical IPR cases, which may have significant commercial value, raises questions about the IPR body.
Government rules on manpower which are related to IPR cases seek to address these concerns. The quasi-judicial nature of the job entails that not only should the person in question be well-trained, but his judgment should be in sync with government’s vision and IPR and patent laws.
The fact that thousands of patent and trademark orders issued by the CGPDTM may be legally unenforceable has put a big question mark on the administration of IPR in the country. The situation has posed risks for businesses which have depended on patents and trademarks to protect their inventions, creations and brands. Wrong or biased orders have the potential to impact investment, deter product development and damage brand image and company reputation. If companies find their IPR invalidated, they could lose their competitive edge, face unwarranted competition from illegal brand users and suffer high legal costs in defending their intellectual property.
With such implications, it is incumbent that CGPDTM, a government body, adheres to the statutory norms, respect rules and avoid outsourcing staff for critical IPR-related cases.
CGPDTM Cases
1. Procter and Gamble Company vs Controller of Patents and Design (2021): The patent application for an innovation related to a toothbrush was denied as the invention was found to lack an inventive step and novelty.
2. Samridhi Enterprises vs Flipkart Internet Pvt. Ltd. & Ors (2023): The Delhi High Court, while ruling on this case, allowed amendments in a patent application, from “method of treatment” claims to “composition” claims, which were previously rejected by the Controller. The verdict held that amendments that do not change the essence of the invention should be allowed.
3. Allergan Inc. vs The Controller of Patents (2021): The Controller rejected the patent application, and the decision was challenged in court. The Delhi High Court eventually upheld the Controller’s decision, corroborated the strict standards needed for patent approval in India.
4. Raytheon Company vs Controller General of Patents and Designs (2022): The Delhi High Court overturned a patent refusal based on Section 3(k) related to an algorithm or computer programme, instructing the Indian Patent Office to reassess the application without adhering to the 2016 Computer-Related Inventions Guidelines.
5. Biomoneta Research Pvt. Ltd. vs Controller General of Patents (2023): The Delhi High Court held that the invention of an “Air Decontamination Assembly” was patentable because the combination of its features as a whole was non-obvious, thereby setting aside the Controller’s earlier rejection.