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Balancing public health and IP rights: compulsory licensing & evergreening
The technological world is broadly divided into ‘innovators’ and ‘followers’. While the latter forms the majority, they cannot exist without the former, which is a small mass putting in billions of dollars, years of effort and partaking in hundreds of trials before revealing a medical marvel the world has been waiting for. The difficulties which innovators go through before launching a product are not always understood. Innovation does not only mean an active pharmaceutical ingredient (API) or a first-generation product, but also, the process is not a ‘start-stop switch’ which turns off as soon as this ‘first’ is achieved.
Biology and medical science together form a complicated system which requires scientists constantly to churn out ideas to improve it every day, and this does not mean a new API every time. It could be a new pharmaceutical mixture, a new form of a drug, tweaking the chemistry, associated delivery system, easier or different route of administration, dosage form, or just a different treatment regime. While all of these can make a significant difference to this system, a differing viewpoint finds these as reasons for the ‘innovators’ to make more money and block competition. These secondary innovations are not considered as ‘real’ innovations and instead termed as ‘evergreening’ – a loosely used metaphor having a negative connotation that is used to describe ways and means by which ‘innovators’ extend their patent monopoly on an API or a first-generation product beyond the original 20-year term.
The usual concerns associated with such claims of ‘evergreening’ revolve around the lack of actual increase in therapeutic efficacy, lack of availability of affordable drugs to the public at large, creation of an anti-competitive landscape and the continued reign of the ‘innovators’.
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Navigating trade secret protection in R&D collaborations
In today’s dynamic business environment, research and development (R&D) collaborations are pivotal drivers of innovation, spanning various sectors. Yet, the efficacy of many such collaborations relies heavily on ensuring the protection of confidential information and/or trade secrets.
This article delves into the intricate requirements and challenges associated with safeguarding confidential information and/or trade secrets within R&D alliances and partnerships, drawing on established legal frameworks and industry norms. Essential aspects, such as clearly defining and identifying trade secrets, establishing robust confidentiality protocols and navigating legal frameworks, are thoroughly scrutinised. Additionally, the impact of emerging technology and globalised R&D networks on trade secret protection strategies is analysed. Through a comprehensive examination of these facets, this article endeavours to provide insights and practical guidance for stakeholders engaged in R&D collaborations to safeguard their intellectual assets in an increasingly interconnected world.
Preserving the confidentiality of trade secrets is crucial for fostering innovation and maintaining competitiveness. In R&D collaborations, it is paramount for sustaining innovation, fostering trust and safeguarding competitive advantage. Within collaborative R&D endeavours, partners often share proprietary information, confidential data and cutting-edge technology to advance mutual objectives. However, without adequate safeguards, this exchange of sensitive information poses significant risks, including misappropriation, unauthorised disclosure and potential exploitation by competitors. Protecting trade secrets not only preserves the integrity of intellectual property but also promotes a conducive environment for open collaboration and knowledge sharing. Robust confidentiality measures, including non-disclosure agreements (NDAs) and access controls, instil confidence in collaborators and mitigate the risk of information leakage. Moreover, safeguarding trade secrets enhances the long-term viability of R&D collaborations by preserving the incentives for innovation and ensuring the equitable distribution of benefits among participating entities.
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India ranks fifth in the Global Generative AI Landscape
India ranks fifth globally in terms of the number of Generative AI (Gen AI) patents published between 2014 and 2023 as highlighted in World Intellectual Property Organization’s (WIPO) recent report.
The report, Patent Landscape Report on Generative Artificial Intelligence, states that between 2014 and 2023, India filed more than 1,500 GenAI patent families for seeking patent protection, leaving behind advanced countries like the UK and Germany.
Globally, Gen AI is revolutionizing various industries by enabling the creation of new content, improving productivity, and fostering innovation. China is leading the way in Gen AI patents, followed by the United States, and notable contributions from countries like the Republic of Korea, Japan, and India.
Between 2014 and 2023, the number of published GenAI patent families globally increased from fewer than 800 to over 14,000 annually. This growth is driven by advancements in deep learning, the introduction of transformer models in 2017, and the release of ChatGPT in 2022, showcasing the vast potential and versatility of GenAI models.
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Figure 1: Key patent families in GenAI, 2014–2023
Key highlights of India’s achievements include:
- Patent Growth: India stands out with a remarkable annual growth rate of 56% in Gen AI patent filing, the highest in the world, although its total number of patents is still relatively small.
- Research Focus: India has an above-average share of all GenAI patent families in networks and smart cities, which indicates a strong focus on urban infrastructure and connectivity.
- Text-Based GenAI: A substantial portion of India's GenAI patent families are based on text data, showcasing the country's expertise in developing language models and text processing technologies; and,
- Top Domains: India’s top domains are software followed by life sciences, business solutions, industry and manufacturing, and document management and publishing.
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Figure 2: India’s top GenAI patent domains
India’s annual growth rate in Gen AI patent families over the decade maybe an indication that the country can become a significant player in the coming years. With continued investments in research and innovation, as well as evolving intellectual property protection, India can further contribute to the development and application of GenAI technologies in various domains.
Although GenAI is still a relatively small part of the overall Artificial Intelligence research activity globally, it is worth noting that the share of GenAI patent publications has been increasing. In 2017, the GenAI share was 4.2%, and it has steadily risen to 6.1% in 2023.
This upward trend suggests that GenAI is slowly becoming more significant within the broader field of AI patenting. Additionally, emerging applications in agriculture, energy management, and healthcare promise to further integrate GenAI into daily life, driving substantial economic impact. The WIPO report cites a recent McKinsey study that estimates that GenAI could contribute between USD 2.6 trillion and USD 4.4 trillion annually across various industries.
About the WIPO Report:
The WIPO report provides observations on patenting activities and scientific publications in the field of GenAI and identifies key research countries, companies, and organizations. They have identified top countries who are leading the way in adopting this technology and securing it through patent families, between 2014 to 2023.
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Delhi High Court Bars JK Cement from Using Akzo Nobel’s Trademark
In an important decision, the Hon’ble High Court of Delhi has restrained JK Cement Ltd. (‘JK’) from using the trade mark “WEATHER SHIELD” in relation to cement.
Akzo Nobel Coatings International B V (‘Akzo Nobel’), an international conglomerate, owns one of the world’s most popular paint brands, DULUX which it uses as a standalone mark and in conjunction with its other reputed marks such as WEATHERSHIELD and VELVET TOUCH. Akzo Nobel filed a suit alleging that JK’s use of the mark WEATHER SHIELD for its cement products amounts to infringement and passing-off.
Rejecting JK’s defense that the mark WEATHERSHIELD is non-distinctive and descriptive, the Court held that Akzo Nobel has prima facie established that the mark WEATHERSHIELD has acquired extensive reputation, both in India and abroad, on account of long and continuous use and extensive marketing. To arrive at this finding, the Court relied on the dual test as articulated in McCarthy on Trademarks and Unfair Competition, namely, the “degree of imagination test” and “competitors’ need test”, which was followed in “Anil Verma v. R K Jewellers S K Group & Anr.” [(2019) SCC OnLine Del 8252]. The “degree of imagination” test requires the court to adjudicate whether a particular mark describes the quality or characteristics of the product or is merely suggestive of products or services. In case of difficulty in making an assessment whether the mark is ‘descriptive’ or ‘suggestive’, then registration of the mark will tilt the case in favour of the plaintiff. The second element of “need of competitors” is the degree to which a competitor, i.e. the defendant requires the same word to describe their goods, or whether there were alternate ways of describing them. Noting that that these two tests are interlinked, the Court observed that if more imagination is required to associate a word with a product in relation to its descriptiveness, the defendant can always adopt an alternative terminology. If the degree of imagination required is higher, the need of the competitor, would be lower.
Applying the above tests, the Court held that the mark WEATHERSHIELD is a coined word having only elements to suggest that the product would shield against weather, but on an overall assessment it cannot be said to be descriptive. The Court further observed that while ‘weather’ and ‘shield’ are two commonly used words, their combination in ‘WEATHERSHIELD’ is unique and distinctive. The Court also held that given that the defendant has attempted to seek registration of the mark ‘WEATHER SHIELD’ as part of the device, it cannot now allege that the said mark is generic.
JK’s argument that its goods being cement are different from Akzo Nobel’s goods being paints was also rejected by the Court. The Court held that the rival goods are allied and cognate and are in fact complementary to each other. The Court relied upon the ‘Aunt Jemima Doctrine’ (Aunt Jemima Mills Co. v. Rigney & Co., 247 F. 407, 2nd Circuit) which stipulates that a mark is protected on goods that buyers would be likely to think came from the same source as plaintiff’s goods.
Based on the above, the Hon’ble Court held that JK’s use of the mark WEATHER SHIELD in relation to cements amounts to infringement and passing off and thus violates Akzo Nobel’s rights in the mark WEATHERSHIELD.
Akzo Nobel was represented by Prashant Gupta, Jithin .M. George and Udit Tewari of K&S Partners.
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Delhi High Court’s Progressive Rulings Favor Microsoft in Software Case
In a recent decision by the Delhi High Court, in the case of Microsoft Technology Licensing, LLC v Assistant Controller of Patents and Designs, the Court reaffirmed that the Guidelines for Examination of Computer Related Inventions (CRI), 2017 (CRI Guidelines 2017), which eliminated the novel hardware requirement, must be applied to determine the patentability of software-related inventions.
Overturning the refusal decision of the Assistant Controller of Patents and Designs (Controller), the Court directed the grant of Microsoft Technology Licensing, LLC‘s (Microsoft) subject patent application (application).
The case revolved around Microsoft Technology Licensing, LLC’s (Microsoft) application for a novel reversible 2D overlap operator to improve the encoding process while maintaining compression quality. This application was rejected by the Controller in 2019.
Microsoft in its appeal finally before the Court, argued that their invention was not a mere computer program but a technical solution to a specific problem. They further contended that the refusal was based on the outdated Guidelines for Examination of Computer-Related Inventions (CRI), 2016 (CRI Guidelines 2016), which required novel hardware to overcome the exclusion of patentability under Section 3(k) of the Patents Act. However, the CRI Guidelines 2017 removed this requirement.
The Controller argued that the invention was solely performed by means of a computer program in C language and being software-based, it squarely falls under the non-patentable category of “computer programs per se” of Section 3(k) of the Patents Act, 1970.
The Court, however, referenced a recent judgement in an SEP dispute, Lava International Ltd. v Telefonaktiebolaget LM Ericsson, to emphasize that an invention incorporating computer programs or algorithms can be considered patentable if it significantly enhances hardware functionality and demonstrates a tangible technical effect or advancement. It must also meet other criteria such as novelty, inventive step, and industrial application.
Additionally, the Court referred to the recent cases of Microsoft Technology Licensing, LLC v The Assistant Controller of Patents and Designs, and Raytheon Company v Controller General of Patents and Designs, to reiterate the inapplicability of the 2016 CRI Guidelines for assessing patentability, and the removal of the novel hardware requirement.
In light of these precedents, the Court observed that the invention has real-world applications and significantly enhances the functionality of the hardware components by enabling efficient and reversible digital media data compression. This directly contributes to reduced storage requirements during processing and hence improves system performance and efficiency of the hardware. Thus, the Court concluded that the application in question did not fall under the exclusions of Section 3(k) and met the criteria for patentability and directed the Controller to grant the application.
The judgement yet again underscores the importance of recognizing technical contributions and practical applications of software inventions, rather than dismissing innovations based solely on their software components. This decision exemplifies the Indian courts’ commitment to ensuring that innovative software-led products and solutions are supported and protected, to foster an environment of technological advancement.
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Suppressed Fact Must be Material to allow revisitation of interim injunction
In the case of Novartis AG & Anr. v Natco Pharma Limited, the Delhi High Court dismissed an application by the defendant, Natco Pharma Limited (Natco), an Indian pharmaceutical company, seeking vacation of the interim injunction granted to Novartis AG (Novartis) in 2023 in the ongoing patent infringement suit against Natco.
Novartis is suing Natco for infringing its Indian patent for Ceritinib, a protein kinase inhibitor used to treat a certain type of lung cancer, alleging that Natco was manufacturing and selling a generic version of Ceritinib without a license. In January 2023, the Court granted an ad-interim injunction against Natco, restraining them from exploiting the suit patent till the disposal of the infringement suit.
Natco then challenged the validity of the suit patent asserting anticipation and obviousness of the claims based on prior art including patents belonging to other pharmaceutical companies such as AstraZeneca, Nigel and Novartis as well.
Natco also argued that Novartis suppressed material facts by not disclosing the filing and subsequent rejection of a divisional application related to the suit patent during the interim injunction hearing. Natco contented that the divisional application was rejected as it did not meet the statutory criteria. Therefore, the rejection should not be seen as mere abandonment and Novartis had a responsibility to disclose these facts as this would have significantly impacted Novartis’s attempt to secure an interim injunction.
Novartis countered that the divisional application was not pursued due to strategic reasons and thus, did not impact the validity of the suit patent. They asserted the refusal did not constitute an adjudication on merits.
The Court dismissed Natco’s application for the vacation of the interim injunction while making the following observations:
- Analysis of Markush claims: It was concluded that the general Markush formula in the prior art did not enable the synthesis of Ceritinib, showing that Ceritinib was not obvious from existing patents;
- Inventive step and therapeutic advantage: The inventive step in creating Ceritinib was highlighted, noting its unique structural modifications and therapeutic advantages, such as fewer side effects, emphasizing the non-obvious nature of Novartis’s patent;
- Merits of the refusal of divisional: Novartis’s divisional application was not rejected on its merits; rather, Novartis chose not to pursue it. This does not prevent Novartis from contesting the validity of the suit patent challenged by Natco. Even if the refusal were on merits, the Controller's decision is not binding on the Court. The Court's independent analysis determined that the suit patent is not vulnerable to invalidity on any grounds raised under Section 64 of the Act, which covers reasons for revoking a patent, such as lack of novelty or obviousness;
- Revisitation of injunction order: Under the second proviso to Order 39, Rule 4, Code of Civil Procedure (CPC), the injunction order cannot be revisited unless there is a change in circumstances or the order causes hardship to the defendant, which was not the case here;
- Suppression of facts: Revisiting the interim injunction order on the grounds of suppression of fact is only warranted if the disclosure could alter the case's outcome. In this instance, the non-disclosure of the divisional application's status did not meet this criterion; and
The Court also delved into the meaning and scope of “suppression of material act” referring to the Supreme Court judgement in SJS Business Enterprises Pvt Ltd v State of Bihar which held:
“13. As a general rule, suppression of a material fact by a litigant disqualifies such a litigant from obtaining any relief. This rule has been developed to deter litigants from abusing the process of the court by deceiving it. However, the suppressed fact must be material in the sense that its disclosure would have affected the merits of the case. It must be a matter significant for the court’s consideration, irrespective of the view the court might have taken [R. v. General Commissioners for the purposes of the Income Tax Act for the District of Kensington].”
The Court thus clarified that only the suppression of a fact that would alter the outcome of the case if disclosed can be regarded as a material fact, justifying a revisitation of the order of interim injunction.
The Court’s stance in this case indirectly suggests that despite the Controller’s thorough examination, the Court’s prima facie assessment could still supersede them. In this case, the Court’s prima facie assessment seems to have weighed heavily, indicating that it is critical to present all relevant information during legal proceedings, more so in patent enforcement proceedings.
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Delhi High Court Backs Microsoft for Clarity & Global Standards in Patent Cases
In Microsoft Technology Licensing LLC v The Assistant Controller of Patents & Designs, The Patent Office, the Delhi High Court highlighted the necessity for procedural fairness and clarity in the patent examination process to align with principles of natural justice and international patent standards.
Appellant, Microsoft Technology Licensing LLC (Microsoft) filed a patent application for an invention related to a method of securing communications through operations of a computer system that encompasses plurality of host devices interconnected by a network, organized into enclaves. The Assistant Controller of Patents & Designs (Controller) rejected the application on the grounds of non-compliance with Section 10(4) and Section 2(1)(j) of the Indian Patents Act, 1970 which deal with the sufficiency of the invention’s disclosure and the lack of inventive step, respectively.
Microsoft argued that the objection regarding sufficiency of disclosure under Section 10(4) was not maintainable due to lack of proper reasoning in the First Examination Report (FER) and complete absence from the Hearing Notice. Furthermore, they highlighted procedural irregularities in the citation of prior art documents, which were not mentioned in the Hearing Notice and the FER. Microsoft also pointed out that the corresponding application in Europe had been granted by the European Patent Office (EPO) where the prior art documents cited by the Controller were not considered obstacles to patentability. Lastly, Microsoft argued that the cited prior art documents did not disclose their invention, and the Controller had failed to provide sufficient reasoning to support his finding. All these aspects were cited as violations of the principles of natural justice.
The Court concurred that the deficiencies in the complete specification identified by the Controller, must be articulated with clarity and should be conveyed properly to an applicant. The Court further highlighted the importance of Section 10(4) and observed that the Controller’s conclusion that a specific claim of the invention fails to meet the standards of Section 10(4) of the Act, without a detailed exposition of the non-compliance, is not legally tenable.
The Court also noted that there are procedural irregularities in the refusal order which it deemed to “undermine the fairness and integrity of the examination process, being violative of principles of natural justice.” The Court clarified the importance of ensuring that an applicant is provided with a fair chance to address any deficiencies identified in their application, and/or to present arguments countering the objections raised.
The Court recognized that the Indian Patent Office (IPO) is required to examine patent applications independently, without being bound by decisions made in corresponding foreign patent applications. However, if the objections and citations align with those considered in foreign jurisdictions in such applications, then the resolution of these objections and the granting of a patent should be considered as a precedent with persuasive value while deciding patentability of an Indian application.
Based on these observations, the Court overturned the Controller’s decision and remanded the matter for fresh consideration. The Court instructed the Controller to issue a hearing notice, clearly delineating any objections and render a decision within four months from the date of the hearing.
This judgment highlights the importance of procedural fairness and adherence to the principles of natural justice while examining patent applications. It re-emphasizes the need for clear and specific articulation of objections, ensuring that applicants have a fair opportunity to address such concerns. Lastly, the judgement recognizes the relevance of decisions provided by foreign jurisdictions in patent applications while assessing the inventiveness and patentability of an invention.
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Google penalized by Delhi High Court for misrepresenting disclosures
In a notable judgment in early April, the IP Division of Delhi High Court dismissed Google LLC’s (Google) appeal against the rejection of its patent application by the Assistant Controller of Patents and Designs (Controller), and imposed a fine of Rs 1 lakh (~USD 1,200) on the tech giant for presenting incorrect information and failing to disclose critical details about its corresponding applications in Europe.
In 2007, Google filed a patent application before the Indian Patent Office (IPO) for its technology that enables users to manage seamless instant messaging across different smart devices like desktops and PDAs, irrespective of the device. The application was rejected by the Controller based on lack of novelty and inventive step in view of prior art.
Aggrieved by the impugned order, Google appealed before the erstwhile Intellectual Property Appellate Board (IPAB). After the dissolution of IPAB in 2021, the case was transferred to the Delhi High Court where it was eventually heard in December 2023. During the proceedings involving detailed arguments on novelty and inventive step by both sides, the Court inquired about the status of the corresponding patent applications in other countries. Google responded by stating that the US and Canadian patent applications were granted, while the European patent (EP) application was abandoned. The IPO’s Counsel refuted this by pointing out that the EP application had in fact been rejected on the basis of lack of novelty and inventive step and not abandoned. Court also found that a divisional application with the identical title as that of the rejected EP application had also been filed and its status was also disclosed as “abandoned”, when in fact it was also rejected on the same grounds.
Taking serious note of Google’s conduct in the proceedings, the Court noted that Google had misrepresented facts to the IPO as well as the Court which also breached its duty of disclosure under the Patents Act, 1970 (Act).
The Court finally dismissed the appeal on merits for not meeting the novelty and inventive step requirement. Additionally, the Court ordered Google to pay costs of INR 1 Lakh (~USD 1,200) for presenting wrong facts to the Court and not meeting the disclosure requirements under the Act.
This judgment re-emphasizes the necessity for applicants to provide complete and accurate information throughout the application process, especially concerning information related to corresponding foreign patent applications, which may be material to the grant.
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Asserting Patent Infringement with the help of Doctrine of Equivalence
The overarching issue in SNPC Machines Private Limited & Ors. v. Mr. Vishal Choudhary revolves around the application of the doctrine of equivalents to determine patent infringement, focusing on whether functional similarities between two competing brick-making machines constitute a violation of patent rights, despite differences in their physical designs and mechanisms.
In April 2024, the plaintiff, SNPC Machines Private Limited & Ors. (SNPC), filed an infringement suit related to brick-making machines against defendant, Vishal Choudhary (Vishal Choudhary), sold under name of Padma Brick Making Machine in the Delhi High Court. The suit sought “permanent injunction” restraining Vishal from using, making, manufacturing, offering for sale or selling or importing impugned brick-making machines.
The suit patent in question is SNPC’s mobile brick-making machine that molds and lays bricks as it moves, controlled by an operator from a cabin. SNPC claimed that Vishal’s machine is doing the same work, in almost the same manner to accomplish the same results as SNPC’s brick-making machine.
However, Vishal contented that there were distinct differences between the two – Vishal’s machine lacked a cabin and steering mechanism, was designed to be towed by a tractor instead of an integrated mobility system like SNPC’s machine and utilized kinetic energy for operation, in contrast to the electrical energy powering SNPC’s machine.
Vishal argued that since their machine did not include every element specified in the patent claims, they did not infringe on the suit patent, invoking the ‘all elements rule’ as a defense. Furthermore, they raised the issue of prosecution history estoppel, stating that SNPC has previously focused only on roller and die assembly matters, which helps in shaping and forming the bricks, whereas now it was also emphasizing the machine’s integrated mobility.
SNPC countered stating that such differences were “trifling and insignificant” and that Vishal’s machine performed absolutely no function while it was stationery, and therefore included wheels to ensure mobility. They invoked ‘the pith and marrow of the invention’ principle and urged the Delhi High Court to not focus only on the “literal infringement”. Furthermore, they urged the Court to apply the “Doctrine of Equivalents”, to check whether the substituted element in the infringing product does “the same function” in substantially “the same way” to accomplish substantially “the same result” (triple identity test). In other words, SNPC claimed that Vishal had merely replaced the integrated mobility of SNPC’s machine with the tractor, to achieve exactly the same result.
The Court concurred with SNPC that the Doctrine of Equivalents should be applied, using the triple identity test, to determine if Vishal’s machine performs the same function in the same way to achieve the same result as SNPC’s product. The doctrine suggests that an invention can infringe on a patented invention if it functions almost the same way and produces a similar result as the patented invention, even if there may be minor differences between the elements or features of the two products. In other words, if the infringing product is equivalent to the patented invention in terms of its functionality, it may still be considered infringing.
Further the Court noted that while there were differences between SNPC and Vishal’s machine, these differences did not detract from the fundamental aspect of the invention – i.e., the mobility to ensure mobility of the assembly, albeit through different mechanisms. The Court concluded that these differences, according to the doctrine of “the pith and marrow”, were integral to the core functionality of the invention. The Court further interpreted that, without “mobility” the Vishal’s machine would serve no purpose considering it had a roller and die mechanism as well, therefore did not absolve them of infringement.
The Court considering all the facts and evidence, submitted granted a interim injunction in favor of SNPC, restraining Vishal from manufacturing and selling brick-making machines similar to the Plaintiffs’ patented brick-making machines. By focusing on the essential functionality of the patented invention, the Court helped protect SNPC against infringement, promoting innovation and fair competition in the market.
This judgment highlights the importance of the doctrine of equivalence in patent infringement cases, where there are two similar products and the question is whether one product performs the same function in the same way to achieve the same result as the patented invention, despite minor differences in their elements.
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New Indian Patents (Amendment) Rules 2024: What You Need to Know
Significant changes to benefit patent applicants and owners
The Indian Patent (Amendment) Rules, 2024 (Rules) have been notified and made effective by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India on March 15, 2024, with an intent to:
- Expedite and streamline the prosecution of patent applications;
- Allow flexibility on certain previously non-extendible deadlines through extension fees;
- Simplify the requirements for corresponding foreign filing particulars as well as working statements; and
- Curb the filing of frivolous pre-grant oppositions.