A Petition to Shutdown the IPAB and Shift Its Functions to High Courts and Commercial Courts

A few weeks ago we had an interesting series of posts on SpicyIP, debating the role of the Intellectual Property Appellate Board (IPAB) and whether it should continue to exist. Along with our former blogger Rahul Bajaj, who is currently a Rhodes Scholar at Oxford, I have drafted the petition below requesting the government to consider a proposal to scrap the IPAB and transfer its functions back to commercial courts and High Courts. We intend to send it to the Ministry of Commerce on Monday. If any of our readers have comments on the petition or would like to add their name to it please feel free to email me at preddy85[at]gmail.com:

Dear Mr. Goyal,

Sub: A petition to shut-down the Intellectual Property Appellate Board (IPAB) and transfer its functions to Commercial Courts & High Court

1. In 2015, while addressing a conference of Chief Justices and Chief Ministers, Mr. Narendra Modi, the Prime Minister of India, had questioned the efficacy of tribunals and voiced concern over the low rate of disposals of cases by tribunals that were set up with the specific purpose of speeding up litigation in India.[1] One such tribunal which operates under the Department for Promotion of Industry and Internal Trade (DPIIT) is the Intellectual Property Appellate Board (IPAB).
2. The story of the origin of the IPAB is still a mystery. There is no publicly available document explaining the rationale for creating the IPAB or expanding its functions every few years. Since it was originally proposed in the Trade Marks Bill, 1993, the IPAB’s jurisdiction has been widened significantly, to include a number of functions that were originally discharged by the High Courts as well as the Copyright Board. The IPAB’s powers includes hearing appeals against the orders of the Controllers of Patents and the Registrars of Trademarks, hearing revocation/rectification petitions against registered patents and trademarks and finally, determining royalty rates under the Copyright Act.
3. A myth often used to justify the creation of the IPAB is that IP litigation requires technical expertise on the bench. This makes little sense for trademark litigation which usually involves comparing and understanding two trademarks and understanding the nuances of trademark law. For patent litigation, there is an element of technical expertise that is required but it is a known fact that no single Technical Member can have the scientific expertise to hear cases across the board, ranging from biotech patents to mechanical patents. Rather, like in other cases involving questions of science(s) such as criminal cases involving forensics sciences, the courts can depend on expert witnesses for assistance. In fact the Patents Act has such a provision for the appointment of scientific advisors[2] and High Courts while deciding patent infringement lawsuits have relied on expert witnesses to reach satisfactory conclusions. It should be understood that questions like ‘inventive step’ or ‘anticipation’ are as much questions of law as they are questions of fact. It would also be pertinent to mention over here that two of the finest patent law judges in India, Justice (retd.) Prabha Sridevan and Justice Ravindra Bhat, currently on the Supreme Court did not have degrees in sciences.
4. Since its creation, the IPAB has been dysfunctional for large periods of time. For instance, the IPAB has not been able to hear patent cases since 2016 when the last Technical Member (Patents) retired from the Board. It has not had a Technical Member (Trade Marks) since December, 2018.[3] Since its inception, as per our calculations, the IPAB has not had a Chairperson for a cumulative total of 1,130 days.[4] The delays in appointment have in turn caused severe delays in the progress of IP litigation in India. Such delays have been commented upon by even the United States Trade Representative (USTR).[5] These delays presumably have a very real cost on the Indian economy, especially for sectors where intellectual property is vital. One such example is the pharmaceutical industry where the revocation of a patent over a pharmaceutical product can cause entry of competitors. This can translate into a reduction in prices through increased competition. Similar examples can be found in many other sectors where IP is an increasingly important variable in business calculations.
5. Part of the problem with the multiple laws that vested jurisdiction in the IPAB, is that they divided litigation between regular courts and the IPAB. For instance, trademark and patent infringement suits can be filed only before District Courts or High Courts with original civil jurisdiction, while the IPAB can hear only revocation petitions. The questions of law and fact are often quite similar in both infringement and revocation lawsuits. It makes little sense to divide such litigation between two different forums. The specter of overlapping litigation between the IPAB and the regular courts has also caused significant confusion and litigation, with one case travelling all the way till the Supreme Court for a hearing on just this one issue.[6]
6. On the few occasions that it operates, the IPAB usually functions only in Chennai where it is headquartered or in Delhi where it has a secondary office. On rare occasions its judges fly to Mumbai to hold hearings. Its Chennai office is lacking in infrastructure and the minimum requirements as outlined by the IPAB’s former Chairperson Justice Prabha Sridevan in her report to the Madras High Court are yet to be met by the government.[7] The IPAB has been operating in Chennai out of the selfsame building since its inception. Promises of a new building are yet to be met. More worrying than the infrastructural constraints is the fact that the IPAB’s existence severely impedes physical access to justice because even on the best of days it is present only in two cities. On the other hand, infringement lawsuits can be filed in District Courts or High Courts (with original jurisdiction) across the country. IP litigation in India these days is no longer the preserve of big corporations. Small and medium industries across India are increasingly involved in IP litigation. Due to the present state of affairs, important industrial and commercial centers like Mumbai, Gujarat, Bengaluru and Hyderabad can access the IPAB only through lawyers located in Chennai or Delhi or alternatively spend on the travel of local lawyers to those cities, thereby increasing costs of litigation. Prior to the creation of the IPAB, similar cases could be heard in High Courts across the country.
7. Over the last decade, the DPIIT has faced several lawsuits before various High Courts and on occasion before the Supreme Court over the IPAB. Some of these challenges pertained to the independence of the IPAB[8], while others have included lawsuits over appointments[9] or lack thereof[10]. Each such lawsuit creates additional administrative work for the DPIIT. Earlier this year, the Supreme Court was forced to intervene to keep the IPAB running.[11]
8. While infrastructural issues can potentially be resolved by directing more money and resources, we are of the considered view that these solutions will still not address the root cause of the problems outlined above viz. the IPAB itself. This fundamental problem can be addressed by shutting down the IPAB and transferring its functions to the commercial courts created under the Commercial Courts Act, 2015. This legislation was brought in by your government to speed up commercial litigation. While there is no doubt that the commercial courts have their share of problems[12], on balance, we think that they would be a significantly better forum than the IPAB for the resolution of IP disputes. . This is for the following reasons. First, these commercial courts exist across the country and not just in Delhi and Chennai. Second, the government, especially the Law Ministry and DPIIT are making sincere efforts to streamline the functioning of the commercial courts through e-filing[13], greater transparency measures[14] and modern procedural interventions like case management hearings[15]. Rather than spend administrative and financial resources trying to improve the IPAB, we think it is more sensible for the government to direct its attention towards strengthening the institutional framework for commercial courts as a whole. The appellate function of the IPAB can be shifted back to the High Courts, as was the case prior to the constitution of IPAB.
9. As with any bold measure of reform, there is bound to be opposition to our recommendation, especially from IP lawyers benefitting from the current state of affairs. There may also be a constituency of people genuinely believing that the IPAB’s continued functioning would be a good idea. Notwithstanding this reality, the Ministry must take strength from the Prime Minister’s statement made in 2015 and shut down non-performing tribunals.
10. We must also hasten to add, that we are not the first people to suggest the scrapping of the IPAB. Many years ago in 2013, Justice Prabha Sridevan who was the former Chairperson of the IPAB, wrote an opinion editorial in a national newspaper recommending that the government shut down the IPAB and transfer its functions back to the High Courts.[16] She reiterated that view as recently as in April this year.[17]
11. Today with the benefit of hindsight, it is safe to conclude that the creation of the IPAB under the Trade Marks Act, 1999 was a historic mistake and it is up to the government to take steps to rectify this error. We hope the government takes cognizance of our representation and initiates a discussion with all stakeholders on this very important issue.

Yours Respectfully,

Footnotes:

[1] “PM Narendra Modi critical of Tribunals, asks if they are a barrier for justice”, Economic Times , April 5, 2015 available at https://economictimes.indiatimes.com/news/politics-and-nation/pm-narendra-modi-critical-of-tribunals-asks-if-they-are-barrier-for-justice/articleshow/46813862.cms

[2] Section 115 of the Patents Act, 1970.

[3] Prashant Reddy T., “The case for scrapping the IPAB”, SpicyIP, April 15, 2020.

[4] Id.

[5] “2020 Special 301 Report”, Office of the United States Trade Representative, April, 2020 at p. 51 available at https://ustr.gov/sites/default/files/2020_Special_301_Report.pdf.

[6] Aloys Wobben and Another vs. Yogesh Mehra and Others, (2014)15 SCC 360.

[7] Report of the Chairperson, Intellectual Property Appellate Board as per the orders of the Hon’ble High Court of Madras dated 06.06.2011 filed in W.P. 1256 of 2011 before the High Court of Judicature at Madras available at https://www.spicyip.com/docs/CCF09212011_00001.pdf

[8] Shamnad Basheer v. Union of India W.P. No. 1256 before the High Court of Madras decided on March 10, 2015.

[9] Sanjeev Kumar Chaswal v. Union of India W.P.  (C) No. 6299/2011 before the High Court of Delhi decided on October 3^rd, 2011.

[10] Asian Patent Attorney Association (India Group) v. Union of India W.P. No. (C) No. 2251 of 2011 before the High Court of Delhi; Order dated July 8, 2019 in Mylan Laboratories Ltd. v. Union of India W.P. (C) No. 5571/2019 & C.M. Appln. 24540/2019 before the High Court of Delhi;

[11] AIPPI v. Union of India W.P. No. 1431/2019 before the Supreme Court of India.

[12] Ameen Jauhar & Vaidehi Misra, “A critical look at the Commercial Courts Act: Govt. must avoid misadventures”, Business Standard, June 23, 2019.

[13] Asit Ranjan Mishra, “Ease of doing business: DIPP calls for fast-track commercial courts”, Livemint, January 9, 2017. See http://e-commcourt.gov.in/.

[14] Commercial Courts (Statistical Data) Amendment Rules, 2020.

[15] Order XVA of the Code of Civil Procedure as amended by the Commercial Courts Act, 2015.

[16] Prabha Sridevan, ‘Whose Tribunal is it anyway?’, The Hindu, November 15, 2013 available at https://www.thehindu.com/opinion/op-ed/whose-tribunal-is-it-anyway/article5351733.ece.

[17] Prabha Sridevan, ‘Regarding the Scrapping of the IPAB’, SpicyIP April 21, 2020 available at https://spicyip.com/2020/04/regarding-the-scrapping-of-the-ipab.html.