ABOLITION OF INTELLECTUAL PROPERTY APPELLATE BOARD (IPAB): A BAD DECISION?

Yashila Bansal

The author is a student at Chanakya National Law University

Introduction

The former Intellectual Property Appellate Board (IPAB), which was disbanded by the parliament last year, referred 401 cases to the Delhi High Court's Intellectual Property (IP) Division. A public notification released by the Registrar of Courts states that the court has also received 52 rectification cases from the IPAB.

The Intellectual Property Appellate Board (IPAB) which is headquartered in Chennai, as per a report, was founded in 2003 and primarily served as an appellate body to hear appeals and applications against decisions of the Controller of Patents under The Patents Act of, 1970; decisions of the Registrars under three Acts, namely The Trade Marks Act, 1999; The Geographical Indications of Goods (Registration and Protection) Act,1999; and The Copyright Act, 1957; as well as decisions of the Plant Varieties Protection Authority under The Protection of Plant Varieties and Farmers Right Act, 2001.

Tribunals are designed for faster, less expensive, and more expert resolution, and the IPAB, with a mix of judicial and technical members adjudicating, was rather fundamentally sound. The creation of an Appellate Board appeared to lighten the load on the High Courts. However, IPAB orders could be challenged in the High Courts and then in the Supreme Court in cases where High Court orders had to be challenged, resulting in a lengthy prosecution process. To address this, the Ministry of Commerce and Industry issued a press release on December 6, 2019, stating that "applicants of all Intellectual Property Rights (IPRs) can directly file a Special Leave Petition (SLP) before the Hon'ble Supreme Court against any order of the Intellectual Property Appellate Board (IPAB)," suggesting that appeals against IPAB orders could be filed directly before the Supreme Court. The press release from the Ministry of Commerce and Industry supported the IPAB and reaffirmed its significance.

Hurdles & Subsequent Abolition

However, IPAB encountered several hurdles and was also heavily criticised due to the same, which ultimately led to its abolition through a notification in April 2021 after almost 18 years of its inception.

In 2010, in the case of Shamnad Basheer v. Union of India, the plaintiff argued that the Intellectual Property Appellate Board (IPAB) lacked adequate independence from the government to carry out judicial duties and challenged the legitimacy of the IPAB before the Madras High Court. The plaintiff won the lawsuit when the High Court invalidated important parts of the parent statute and ordered the government to make the necessary adjustments to ensure the tribunal's independence.

As per a blog of Spicy IP, over the course of the IPAB’s history, there have been 1,130 days without a chair. For instance, in 2006, 256 days passed between Justice Jagadeesan's retirement and the appointment of Justice M.H.S. Ansari. Similar to this, in 2011, there were 262 days between Z.S. Negi's retirement and the appointment of Justice Prabha Sridevan. After Justice K.N. Basha retired, there was a 597-day gap till Justice Manmohan Singh was appointed in 2018.

The IPAB was also unable to hear appeals or revocations relating to patents for four years since the statute necessitates a minimum quorum of one judicial member and one technical member to hear any form of case. Similarly, the IPAB had no quorum to hear trademark disputes for more than a year because there hadn't been a technical member for trademark proceedings since December 2018.

In the matter of Mylan Laboratories Limited v. Union of India, the Hon'ble Court noted that there have been no technical members nominated for copyrights at all and that there have not been any members assigned for trademarks or patents since 2018 and 2016, respectively. As a result, there has been a build-up of cases, and given that IP holders have a very narrow window of opportunity to gain profit from their rights, delays in hearing these cases might have major repercussions. As a result, the Delhi High Court used the "Doctrine of Necessity" so that the Chairman of IPAB may hear the outstanding cases with the current technical members till further technical members were appointed.

Abolition: a bad idea?

The idea of eliminating the IPAB at a time when there is more demand for intellectual property rights may not be good. The majority of stakeholders believe that the IPAB should be revived in order to improve India's IP environment at this time when intellectual property rights are valued highly.

As per the statistics, the IPAB's disposal rate between August 2020 and February 13, 2021, was as follows: at the time, 140 cases out of 864 cases involving trademarks; 126 cases out of 464 cases involving patents; and 52 cases out of 217 cases involving copyright, were resolved.

With regard to overturning Indian Patent Office (IPO) rulings, the IPAB has a track record of success. Only around 3% of the 3,793 instances, which the IPAB decisions have been challenged, and fewer than 1% of those challenges have resulted in the decision being overturned. The Supreme Court has therefore consistently sustained decisions made by the IPAB. With a full quorum, the IPAB typically disposes of 26.7 cases every month. However, in August 2020, with a fully operational IPAB and with the appointment of technical members, the pace of disposal increased to 48.9 per month.

The overall dissolution of IPAB, which had been successfully handling cases containing complicated IPR concerns, has left a gap in the appellate settlement of cases, causing them to be transferred to Commercial or High Courts and lengthening the time of pending cases.

Since a technical member, in addition to a judicial member, is required in accordance with Section 116 of The Patents Act, 1970, the technical member would be an essential participant in patent hearings. But the High Courts do not currently have one. Since the High Court judges are mostly lawyers with little experience in these sciences, it is necessary to have a second technical member present when considering patent appeals. An extra condition would mean that new technical members would need to be hired, who could meet the standards set by the High Courts for hearing patent appeals. This essentially runs counter to the whole justification for abolishing the IPAB in the first place.

Also, in an interview, Justice Manmohan Singh (Former Judge of the Delhi High Court), who has been the Chairperson of the IPAB since 2018, criticised the government's decision to abolish the tribunal and claimed that it would have a negative effect on trade internationally because India was required, by The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), to have a separate tribunal to handle IP cases. Due to India's adherence to the TRIPS Agreement, the IPAB was established through legal modifications.

A Way Forward

The Indian government's bipartisan Parliamentary Standing Committee on Commerce issued a report barely three months after the abolition of IPAB, which was titled, “Reforms to the Indian Intellectual Property Rights Regime” and suggested changes to India's intellectual property rights law. The group also calls for the reinstatement of the Intellectual Property Appellate Board (IPAB).

According to the report, the IPAB is an important aspect of India's ecosystem. Its abolition should be reviewed, and its restructuring and empowerment should be considered. It was argued that IPAB delivered several landmark and path-breaking decisions during the last decade or so, and so the choice to dismantle IPAB should be substituted by enhancing its current structure. The committee also stated that, because the appointment of senior officials hampered IPAB's ideal performance, administrative reforms and the timely appointment of experienced personnel are required. The Committee was also concerned by the government's failure to perform any Judicial Impact Assessments or active stakeholder engagements prior to the abolition of IPAB. It strongly advises the government to conduct a Judicial Impact Assessment before eliminating key tribunals by an ordinance, as well as broad consultations with relevant stakeholders, to guarantee a systemic perspective on dismantling an established institution in the country.

Therefore, transferring cases to the High Courts would only choke an already obstructed pipeline and may not even result in the timely disposal of cases. Faster appointments and improved stakeholder participation in the IPAB are much easier fixes that simply require a little bureaucratic willpower.