The Analysis of Quasi-Judicial Functions and Appointments in India’s Patent and Trademark Offices

16th October, 2024 - 6:34 am Categories: Patents Trademark 0 Comments

Introduction

India’s Intellectual Property (IP) ecosystem faced many challenges in recent times because of technological advancements, new forms of inventions etc., one of the major challenges is the appointment of the employees in the Patent and Trademark Offices. These appointments are critical, as they affect the final grant of the intellectual property rights.

The Indian Patents Act, 1970,[1] and the Trade Marks Act, 1999,[2] deal with the roles of the Controller General of Patents, Designs, and Trademarks. They also describe other officers who manage the applications and disputes related to IP in India. According to Section 73 of the Patents Act,[3] the Controller General appointed serves as the Controller of Patents, Designs, and Trademarks. The central government is in charge of appointing examiners and other officers to help with the work of the Patent and Trademark Offices. These officers have quasi-judicial powers, which means their decisions are legally binding and they have authority to interpret laws. The Controller has the same powers as a civil court.

To become a patent officer, candidates must pass the Patent Agent Examination. This exam is for graduates in law, engineering, or science. Many qualified people want to enter this field. Recently, there have been controversies about appointment of the contract workers to fill staff shortages in the Patent and Trademark Offices. These contract workers are called managers and hearing officers. On August 8, 2024, the Calcutta High Court ruled that hiring these contract employees for quasi-judicial roles was illegal.[4] The court said that orders from these workers had no legal authority and were void. This ruling showed that proper legal authority is needed when appointing officers with important powers. On October 7, 2024, a Public Interest Litigation (PIL) was filed in the Delhi High Court against the appointment of a central patent officer. The court dismissed the PIL but raised concerns about hiring practices.[5]

Staff Shortages and Outsourcing: A Systemic Issue

India’s Patent and Trademark Offices do not have enough qualified staff members to handle the work. Because of this lack of staff, applications take a long time to be processed. The Controller General’s annual report for 2022-2023 shows that it now takes an average of 58 months to process patent applications in India. This is a very long time. In comparison, other countries like China and the United States can process similar applications much faster. In those countries, it only takes about 20 to 23 months to complete the same process.[6]

There has been an increase in patent applications in India due to reforms and a focus on intellectual property rights. The number of applications rose from 45,444 in 2016-17 to 66,440 in 2021-22. During the same time, patents granted in India increased from 9,847 to 30,074. The share of resident applicants also grew from less than 30% in 2016-17 to 44.5% in 2021-22. Despite these improvements, India still falls behind other countries. In 2020, India filed 56,771 patents, which was only 4% of the 14.97 lakh applications filed in China and 9.5% of the 5.97 lakh applications in the U.S. India granted 26,361 patents, compared to 5.3 lakh in China and 3.5 lakh in the U.S.  The main reason for these delays is the lack of staff in the patent office, which had only 860 employees as of March 2022. In contrast, China had 13,704 employees and the U.S. had 8,132. As a result, about 1.64 lakh applications were pending at the controller level as of March 31, 2022.[7]

To this, the Patent Office had to even outsource 790 jobs, through the Quality Council of India. The company is estimated to pay around ₹50.26 crore annually. Lately, however, a court ruling said that contract appointments are not permanent solutions. The reason is that any orders made by the contract employees hold no legal validity. This is in addition to the thousands of cases pending in courts. A total of 2,31,977 trademarks were registered in the just-concluded year 2022-23. The figure is marginally lower than the 2,61,408 trademarks that were registered in 2021-22. Increase in trademark filings happened at a time when the Patent Office hired contract officers to supplement the workforce at a time when it was short of employees. The most of the contract officers were not trained and lack the professional competence dispose the hearings the applications. As a result, doubts hover around their quality of work and decisions they take.[8]

The legality of hiring contract workers was questioned in a case at the Calcutta High Court. In this case, the court looked closely at a trademark opposition order made by an ‘Associate Manager’ of Trade Marks. Usually, only officers from central or state governments, universities, and other official bodies can apply for jobs in the Patent Office. However, in this case, the officers were appointed as hearing officers. In about 50% of the cases, a First Examination Report (FER) is followed by an oral hearing, which is when intellectual property (IP) rights are granted. This hearing is like an interview with the examiner and helps solve any objections raised after the FER was filed.[9] It is very important for applicants to attend the oral hearing and submit written responses. If they do not, they may lose their rights to the trademark application. The heavy reliance on contract workers in these important roles raises concerns. It makes people doubt whether the examination process is consistent and legally valid.

Historical and Policy Perspective: India’s IPR Framework

Indian intellectual property laws are the British colonial regulations, mainly directed by the interests of the British economy. Yet, within the decades since independence, a few efforts have been made to strengthen these laws. Many changes, though, have been subject to existing pressure from foreign companies. According to ranking lately, India ranks at 42^nd among the 55 countries regarding its IPR framework; this ranking shows the struggle that the system still undergoes in fashioning a robust framework that supports innovation in India.[10]

IP reform is highly essential for making India a world leader in the field of technology and manufacturing. Although the application for patents seems to be somewhat high, India lags behind China and the U.S. significantly in the number of applications as well as issued patents.

Legal Framework and Court Rulings

The legality of appointing officers in quasi-judicial roles is based on different sections of the Trade Marks Act, 1999. Courts have stressed that these roles must be carried out with close attention. Contractual employees cannot be given these responsibilities without proper permission. In a past case, Intellectual Property Attorneys Association v. Union of India, the Delhi High Court decided that quasi-judicial powers must be used independently.[11]

The recent ruling from the Calcutta High Court pointed out more issues with temporary appointments. The court stated that many orders made by unauthorized officers are legally invalid and need to be reviewed again. The Associate Managers of Trade Marks who made these orders did so without proper authority, making their decisions void. The cases are sent back for reconsideration by an authorized official under the Act.[12]

The Court explained that according to Section 3(1),[13] the Controller-General of Patents, Designs, and Trade Marks is the Registrar of Trade Marks. Section 3(2) says that other officers appointed by the Central Government can only perform these functions if authorized by the Registrar.

The Court noted that a public notice was issued on December 21, 2021. This notice invited applications for hiring ‘Hearing Officers’ on a contract basis. On April 13, 2022, an offer was given to Associate Manager 1. He was hired as a Contract Hearing Officer. Associate Manager 2 was hired for the same position on June 14, 2023. The Court also mentioned that on November 28, 2022, the Controller General assigned various functions of the Registrar. This was done using an e-module of the Trade Marks Registry System.

On May 24, 2023, the Head Offices of the Trade Marks Registry were allowed to assign work to contract workers hired through the Quality Council of India. The Court referred to the earlier case, where the Delhi High Court held that the Registrar of Trade Marks has quasi-judicial power under the Act.[14]

The Court explained that the term “other officers” in Section 3(2) means officers other than the Registrar or Controller General of Patents, Designs, and Trade Marks should come from an official cadre.[15] The Court emphasized that quasi-judicial functions must be performed independently and cannot be directed by anyone else, including the Registrar. It concluded that Section 3(2) allows for the delegation of administrative powers, not quasi-judicial powers.

Additionally, the Court pointed out that on September 16, 2023, the date of the disputed order, Associate Manager 1 was not in the position according to the engagement offer from April 13, 2022. Therefore, the Court cancelled the orders made on September 16, 2023, and October 6, 2023, by both Associate Managers. Finally, the Court ordered that the case be heard again by an authorized official under the Act.[16]

Therefore, the recent issue of the appointment of the quasi-judicial officers by the quality council of India for the contractual basis is not valid, as it undermines the importance and role of quasi-judicial officer. According to the Section 3(2) of the trademarks act, the appointment of the other officers for the patent and trademark means officers from the official cadre but not the individuals without any appropriate training and competence. The stance taken by the court in these issues clarifies and resolves the present issue at hand, but in the larger picture there is need of intervention from the legislature to draft rules for the appointment of such officers for the execution of functions and systemic reforms for long-term solution to the issue at hand.

Conclusion

The Contractual Appointment of the officers for the Patent and Trademark Offices expose the fundamental problem within India’s intellectual property regime. There is a need of systematic reforms in the Intellectual Property Rights regime in India by Government. However, it needs to work towards building a strong workforce, for proper administrative functions, thorough screening before grating any exclusive right and instilling trust in functioning of the government offices. The quasi-judicial functions are taken up by the officers, the decisions taken by them are binding and have larger impact, recent controversies related to the grant of various patent and trademarks by contractual officers raise serious questions about the integrity of the patent and trademark office. In way forward, its need of hour to reform the Intellectual Property Rights to changing technological developments and strengthening administrative functions such as the appointment of officers, their tenure and checks and balances for efficient functioning.

Author: Pulugam Devaki, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

References

[1] The Patents Act, No. 39 of 1970 (India).

2 The Trade Marks Act, No. 47 of 1999 (India).

3 The Trade Marks Act, No. 47 of 1999 § 73 (India).

4 Visa International Ltd vs Visa International Service.

5 Investing.com. Delhi HC adjourns hearing on plea seeking removal of CGPDTM, (Oct. 7, 2024), https://in.investing.com/news/stock-market-news/delhi-hc-adjourns-hearing-on-plea-seeking-removal-of-cgpdtm-4462388

6 Sanjeev Sanyal & Aakanksha Arora, Why India Needs to Urgently Invest in Its Patent Ecosystem (EAC-PM, Aug. 2022), https://www.ies.gov.in/pdfs/why-India-needs-to-urgently-invest-in-its-IPR-ecosystem-16th-Aug-2022.pdf.

7 Indian Express. Revalidate all decisions by contractual staff: DPIIT directs patent office, (Aug. 11, 2024), https://indianexpress.com/article/business/economy/matter-pertains-to-trademark-not-patents-official-9508564/.

8 J.P.A. Associates. (2020). Understanding the oral hearing process of Indian patent examination. https://www.mondaq.com/india/patent/880214/understanding-the-oral-hearing-process-of-indian-patent-examination

9 Indian Express. (2024, February 28). India ranks 42 out of 55 in International Intellectual Property Index. https://indianexpress.com/article/technology/tech-news-technology/india-intellectual-property-index-9185854/

10 Intellectual Property Attorneys Association v. Union of India, AIRONLINE 2021 SC 157

11 SpicyIP. Close to 2 years of trademark registry orders under scrutiny after questions of illegal delegation of examiner duties arise, (Aug. 9, 2024), https://spicyip.com/2024/08/close-to-2-years-of-trademark-registry-orders-under-scrutiny-after-questions-of-illegal-delegation-of-examiner-duties-arise.html.

12The Trade Marks Act, No. 47 of 1999 § 3(1) (India).

13 Indian Express. Shadow over trademarks after HC says hiring contract staff in patent office illegal, (Aug. 8, 2024), https://indianexpress.com/article/india/shadow-over-trademarks-after-hc-says-hiring-contract-staff-in-patent-office-illegal-9505592/.

14 The Trade Marks Act, No. 47 of 1999 § 3(2) (India).

15 SCC Online. Relief for trademark practitioners: Calcutta HC sets aside orders passed by trademark managers, (Aug. 9, 2024), https://www.scconline.com/blog/post/2024/08/09/calcutta-hc-associate-managers-appointed-under-32-trade-marks-act-not-empowered-to-pass-quasi-judicial-orders/.

[1] The Patents Act, No. 39 of 1970 (India).

[2] The Trade Marks Act, No. 47 of 1999 (India).

[3] The Trade Marks Act, No. 47 of 1999 § 73 (India).

[4] Visa International Ltd vs Visa International Service.

[5] Investing.com. Delhi HC adjourns hearing on plea seeking removal of CGPDTM, (Oct. 7, 2024), https://in.investing.com/news/stock-market-news/delhi-hc-adjourns-hearing-on-plea-seeking-removal-of-cgpdtm-4462388.

[6] Sanjeev Sanyal & Aakanksha Arora, Why India Needs to Urgently Invest in Its Patent Ecosystem (EAC-PM, Aug. 2022), https://www.ies.gov.in/pdfs/why-India-needs-to-urgently-invest-in-its-IPR-ecosystem-16th-Aug-2022.pdf.

[7] Id.

[8] Indian Express. Revalidate all decisions by contractual staff: DPIIT directs patent office, (Aug. 11, 2024), https://indianexpress.com/article/business/economy/matter-pertains-to-trademark-not-patents-official-9508564/.

[9] J.P.A. Associates. (2020). Understanding the oral hearing process of Indian patent examination. https://www.mondaq.com/india/patent/880214/understanding-the-oral-hearing-process-of-indian-patent-examination.

[10] Indian Express. (2024, February 28). India ranks 42 out of 55 in International Intellectual Property Index. https://indianexpress.com/article/technology/tech-news-technology/india-intellectual-property-index-9185854/.

[11] Intellectual Property Attorneys Association v. Union of India, AIRONLINE 2021 SC 157.

[12] SpicyIP. Close to 2 years of trademark registry orders under scrutiny after questions of illegal delegation of examiner duties arise, (Aug. 9, 2024), https://spicyip.com/2024/08/close-to-2-years-of-trademark-registry-orders-under-scrutiny-after-questions-of-illegal-delegation-of-examiner-duties-arise.html.

[13] The Trade Marks Act, No. 47 of 1999 § 3(1) (India).

[14] Indian Express. Shadow over trademarks after HC says hiring contract staff in patent office illegal, (Aug. 8, 2024), https://indianexpress.com/article/india/shadow-over-trademarks-after-hc-says-hiring-contract-staff-in-patent-office-illegal-9505592/.

[15] The Trade Marks Act, No. 47 of 1999 § 3(2) (India).

[16] SCC Online. Relief for trademark practitioners: Calcutta HC sets aside orders passed by trademark managers, (Aug. 9, 2024), https://www.scconline.com/blog/post/2024/08/09/calcutta-hc-associate-managers-appointed-under-32-trade-marks-act-not-empowered-to-pass-quasi-judicial-orders/.