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BENAMI PRE GRANT PATENT OPPOSITIONS BY FICTITIOUS PERSONS

June 2, 2021

By Priya Adlakha, Sukku and Rima Majumdar

INTRODUCTION

The practice of filing pre-grant patent oppositions through fictitious persons namely, the Benami Patent Oppositions have become quite prevalent amongst entities to halt the grant of patent of their competitors.

An act done by a fictitious person in the name of someone else by masking the identity of the real person behind the said act/transaction, was prevalent in the past in India, in respect of immovable property transactions.  Pre-grant opposition is filed by any person against the application for grant of patent, towards having the application refused and patent not granted.

Fictitious pre-grant oppositions

Fictitious pre-grant oppositions (in Hindi: Benami opposition) have not escaped the attention of judicial scrutiny. Before proceeding with the judicial pronouncements given over a period of time, around fictitious (Benami) pre-grant oppositions in the context of patents, let us briefly go through the statutory scheme governing pre-grant oppositions.

Section 25 of The Patents Act, 1970, as it stood before the Patent (Amendment) Act of 2005, provided for filing opposition against grant of patent. Section 25(1) provided that at any time within four months from the date of advertisement of the acceptance of a complete specification, any person interested may give notice of opposition to the grant of patent to the Controller of Patents (Controller) on the grounds set out in Section 25(1)(a) to 25(1)(k) of the Patents Act. Section 25(2) states that when any such notice of opposition is given, the Controller shall notify the applicant (for a patent) and give to the applicant and the opponent an opportunity of being heard before deciding the case.

Therefore, prior to the 2005 amendment, a patent application could be opposed only at a pre-grant stage (like a trade mark application under the Trade Marks Act, 1999) and only by a person interested (aggrieved) in its grant/refusal.

However, the Patents (Amendment) Act of 2005, which came into force on January 01, 2005, brought significant changes in the scheme of the Patents Act, 1970 and introduced the concept of a ‘post-grant Opposition’ as well as a ‘pre-grant Opposition’ by anyone (not necessarily a person interested) for the first time.

Section 25 (1) of the Patents Act, 1970 (as amended after the 2005 amendment act) provides, that any person can oppose a patent application, after the application has been published, but before the patent has been granted i.e. at the pre-grant stage, on the grounds provided under 25(1)(a) to 25(1)(k).

Section 25 (2) provides for filing of opposition by any person interested, at any time after the grant of the patent but before the expiry of a period of one year from date of publication of grant of patent, on the grounds provided under 25(2)(a) to 25(2)(k).

The grounds for opposition available in 25(1) and 25(2) are almost same. The Definition of ‘a person interested’ is provided under Section 2(t) of the Act which reads as “Person interested includes a person engaged in, or in promoting, research in the same field as that to which the invention relates.”

In practice, while this amended provision has led to a substantial increase in opposition proceedings, it has also led to one wondering that the law is being used to pursue oppositions by covering the identity of the true opponents i.e. by filing ‘Benami Oppositions’.

JUDGEMENTS ON BENAMI OPPOSITIONS 

The IPAB discussed the issue of filing Benami Oppositions in Pfizer Products Inc. vs. The Controller of Patent & Designs & Ors. in OA/2/2016/PT/MUM.

The facts of that case is that Pfizer had approached the IPAB under Section 117A of the Act, challenging the order of the Controller, rejecting grant of a patent for their invention titled as “Optical Resolution Of (1-Benzyl-4-Methylpiperidin-3-YL)-Methylamine And The Use Thereof For The Preparation Of Pyrrolo 2, 3-Pyrimidine Derivatives As Protein Kinases Inhibitors”, under Section 15 of the Act, on the ground that the claims of the invention had already been claimed by another invention previously, and the invention of the Pfizer was also not patentable. In the present case, 18 years had already expired since the patent application was filed, and the patent was yet to be granted. While deciding the issue on hand i.e. refusal to grant patent, the IPAB also discussed in detail the issue of delay in granting patents to valid inventions due to multiple examination reports as well as filing of pre-grant opposition by imposters for fraudulent gain. In paragraph 60 (s), IPAB expressed its view that “we are of the view that the practice of filing of Benami opposition by the Benami opponent and crooked imposter has to be stopped. It is the duty of the respondent (Controller General) that such person(s) may not be allowed to take the advantage of multiple layers of opposition. If any opposition is filed either under Section 25(1) or 25(2), which is bogus and without any merit, the same is to be thrown out at the earliest by the respondent with heavy costs and penalty. Only the genuine oppositions are to be entertained.”

After hearing, the said appeal was allowed by the IPAB on August 10, 2020 on merits, setting aside the order of the Controller and allowing the patent to proceed for grant. The matter was fixed for pronouncement of order on August 21, 2020 for giving reasons. Immediately thereafter, a representation was made in the IPAB by a patent agent on behalf of one Mr. Dhoval Dayabhai Diyora, stating that he has now filed a pre-grant opposition against the said patent application before the Controller, therefore, order allowing the appeal should not be pronounced.

IPAB took a strong view of the conduct of the Imposter Mr. Dhaval Dayabhai Diyora. The representation made by him was rejected by the IPAB for noncompliance of proper procedure for filing pre-grant opposition as well as the delay of 13 years. It was also held by the IPAB that once the appeal is kept for pronouncement of reasons, application to the effect that order should not be pronounced cannot be entertained.

Dhaval Diyora filed a Writ Petition before the Hon’ble Bombay High Court in the case titled as Dhaval Diyora vs. Union of India & Ors.[1] against the above stated order of the IPAB.

The Division Bench of the Hon’ble Bombay High Court, while hearing the writ petition observed that the Petitioner had raised detailed grounds stating various scientific facts, based on which the Petitioner submitted that the patent ought not to have been granted. In this regard, the Court raised an obvious question that “how the Petitioner has intricate knowledge of pharmaceutical compounds when he is a businessman engaged in diamond business. We have not been informed about the educational background of the Petitioner. The Petitioner has made no statements on oath. It is argued that the Petitioner has employed a team of researchers. Particulars of these researchers and who pays the team are not given. Credential of the researchers are not informed. That the Petitioner has filed multiple oppositions does take his case further. It can also mean that he is habitual. Considering the totality of the circumstances, we have serious doubt about the credentials of the Petitioner and find merit in charge of the Respondent no. 4 that the Petitioner is a habitual frontman put up by those who intend to only delay the grant of patent”

Therefore, the Hon’ble High Court dismissed the writ petition with cost of Rs. 25,000 vide its order dated November 05, 2020.

Following on the dicta of the Hon’ble Bombay High Court, the IPAB in the case of Novartis AG vs. Controller General of Patents & Ors., OA/1/2021/PT/DEL also cautioned against the rising tendency of filing fictitious pre grant opposition.

CONCLUSION

The purpose behind any one opposing a patent application should arise from a place of goodwill, and not greed. Issues like public health and nutrition have been accepted in the past for being good reasons for rejecting a patent at the pre-grant stage, on the opposition by a third party. The Appellate Board has however cautioned against the rising tendency of filing of ‘Benami Oppositions’ as an anti-competitive practice, solely intended to monopolize a market and prevent a competitor from patenting their invention.

AUTHOR’S NOTE

It is noteworthy to mention that before the 2005 Amendment to the Patents Act, there was a period of limitation of four months, extendable by one additional month, for filing a pre-grant opposition. However, after the 2005 Amendment, the Act is silent about the period of limitation for filing a patent opposition at a pre-grant stage. Also, there is no time fixed within which the Controller has to dispose off a pre-grant opposition. This lends itself to grave misuse that ultimately defeats the purpose of filing a patent application, if the patentee is stuck at the pre-grant stage indefinitely. Benami opponents are clearly taking advantage of this lacuna in legislation to further their vested interests. Hence, it would be in the ultimate interest of innovation that the period of limitation for filing, as well as deciding a pre-grant opposition be strictly defined in the Act, so that it can act as a safeguard in ensuring that the rights of a genuine patentee are not sacrificed due to ‘Benami Oppositions’.

[1] W.P.(L) No. 3718/2020

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