[The post is co-authored by Praharsh and Sabeeh.]
In light of the controversy surrounding the rejection of BASF’s divisional application, in Part I, we looked at the order granting a patent to its parent application. A few hours after this grant order, BASF co-incidentally filed its divisional application which was rejected by the Patent Office, despite BASF’s request to condone the delay (pdf). Interestingly, the Patent Office still proceeded with examining BASF’s application despite the delay in filing the divisional application which technically should not have been entertained as per Section 16. Nonetheless, the ground of the delay in filing the divisional application was raised in the examination report (pdf) and the hearing notice (pdf). The Controller’s order notes (pdf) that the applicant has failed to meet two basic requirements for filing a divisional application – first, the delay in filing the application after the parent patent grant and second, lack of plurality of invention.
BASF raised two main issues in the appeal against this order. First, there was no way BASF would have known when exactly their parent patent application would be granted, and therefore the filing of the Divisional Application on the same day was a mere coincidence. Second, BASF alleged a violation of principles of Natural Justice as they were not informed about the grounds of non-distinctiveness of their divisional application claims (lack of plurality) before the rejection order, thus depriving them of any opportunity to address these objections. This post will be limited to the first ground of rejection.
Through a very short order, the High Court remanded the matter back to the Patent Office for fresh consideration, setting the rejection aside. The HC order summarily notes- ‘non-application’ of mind’ by the Controller for rejecting the application which was filed the same day as the parent patent grant order; And violation of the principle of natural justice for not informing BASF about the lack of plurality objection earlier, as the reasons for the remand. This may ordinarily seem like the right thing to do because after all, how was the Applicant supposed to know the exact day when the parent patent would be granted, right? However, if you think about it, where did the Controller go wrong? By interpreting the law literally? And does the Court order offer any relief on the whole situation? Does it clarify under which provision the Controller could have applied to resolve this crisis? We’ll look at these questions closely below.
Deadline to File a Divisional Application
For the uninitiated, a divisional application under Section 16 of the Patents Act is filed for separating additional inventions from within the scope of the original application filed by the applicant (see this post by Praharsh and Siddhi). The divisional application must be filed before the grant of the original patent application.
On the first contention, the Deputy Controller submitted that the parent application was granted before the division application was submitted by BASF. However, they eventually accepted that the date of the grant of a patent would not be known to the applicant in any case.
Seeking Certainty and Clarity about Division Applications
BASF’s argument seems to be premised on the confusion as to when exactly a patent is going to be granted. Under the Patent Act or Rules, the Controller does not inform beforehand that a patent will be granted or rejected on a specific date. This may put parties similarly placed like BASF at a disadvantage, where their subsequent divisional applications are dependent on the date of the grant of the parent patent application under Section 16. Interestingly, this is not the first time where such a situation has arisen. Before the Controller, BASF relied on ESCO Corporation v. The Controller of Patents & Designs where the IPAB was dealing with a similar problem and eventually allowed the applicant to file the divisional application. In doing so, the IPAB stressed the need for informing the date of the grant by observing that “an intimation to grant, if introduced, may bring certainty for the date of filing divisional applications”.
But why should this certainty be afforded in a handful of cases, especially in the cases of patent grants? Fixed timelines and more transparent, public announcements about the status of an application will benefit not only the applicant but also other interested parties like the pre-grant opponents. As seen from Rule 55, pre-grant oppositions can be filed at any time before the grant of a patent and after publishing the application. Thus, we can see that not keeping some timelines in place creates an (unintended?) prejudice against several stakeholders, not just the applicants. Also, how would the Patent Office know that on a particular date, it is going to grant a patent? And even if we assume that the Office may have a tentative deadline in mind, how would it know in which case such divisional applications will be filed? In fact in the present case, while defending its deleted claims vociferously against the Patent Office’s earlier objections, BASF did not even hint that it may file a divisional application for these deleted claims (pdf). Perhaps doing so could have saved them from this exercise and appeal!
Reading Literal Interpretation of Law as “Non-Application of Mind”
Ignoring the IPAB’s observation, the Controller seems to be affixed on the requirement that the division application should always predate the order granting a patent regardless of whether the order was passed only hours before the divisional application was filed. This is clear from the following para from the Controller’s order:
“As per records the patent number was generated at 11.59 am on 28/08/2019 for the mother application 7210/CHENP/2012 and the instant patent application 201945034726 was filed at 8.29 pm on 28/08/2019 which clearly indicates that the instant divisional patent application was filed after the grant of parent/mother application and it also indicates that the applicant was well aware of the status of the parent/mother application while filing the divisional application.”
Therefore, the Controller seems to have interpreted the law literally, focusing on the scheme prescribed under Section 16. Keeping aside the Court’s direction for once, it is important to note that the division application was factually filed after the parent patent application was granted. Although the Court allowed the appeal and summarily held that the rejection order was passed “without application of mind”, we must ask under which law could the Controller have allowed this application, when it was filed after the grant of the parent application.
What More Could the Controller Have Done? What about Condoning the Delay?
The Court said that it’s “virtually impossible for the appellant to know the exact timing when the patent was granted”. In its above observation, the Court seems to have overlooked the Controller’s argument that both- the patent number and Letters of Patent were generated and issued simultaneously to BASF before the filing of the divisional application. In that case, could the delay in filing the divisional application be condoned? As per Rule 6(5) of the unamended Patent Rules, the Controller can condone the delay of an applicant if a petition for such condonation is filed immediately after the receipt of the document or communication. The Controller here decided against it and held that between the hearing of the parent application and the grant order BASF has sufficient time to file the division application. In hindsight, it seems like the Controller should have accepted this request and focused on other objections to avoid the whole ordeal. However, it also raises the question that if the Controller did not condone the delay can it be labeled as nonapplication of mind?
If yes, then the Court should have clarified under which law the Controller could have acted and allowed the application so that the same could have assisted officers in future cases. Especially considering that there have been previous instances where such coincidences have occurred, as discussed above.
Some Final Thoughts
The case highlights some of the severe problems affecting the Patent Office, ranging from the uncertainty of timelines to unreasoned and non-speaking grant and rejection orders, and finally lack of efficient measures to check non-speaking orders granting a patent. The plethora of Court orders and some initiatives like mandatory training of officers on writing quasi-judicial orders (see here and here) should help in bringing the instances of non-speaking orders down. The Controllers could (just like High Courts) notify a few days in advance when they’ll be passing the final orders on an application to bring in some sort of certainty within the system. This will give clarity to applicants, as well as pre-grant opponents, for any further steps they may wish to take, given that such a declaration would make it clear what set of documents is finally being considered after amendments, etc. Similarly, the applicants can be proactive and can avoid this situation by keeping the Controller informed in advance about potential divisional applications. But the biggest change that needs to be made within the system is the change in the understanding of the officers, parties, and all the other interested stakeholders that the patent system is in place to benefit the country by rewarding deserving inventions (as determined by law) as quickly as possible, and not by rewarding the most number of applicants as quickly as possible!
A big thanks to Swaraj for his comments on the Post!