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Intellectual Property Appellate Board (IPAB) Amongst Other Tribunals Abolished Through an Ordinance

In a bid to streamline the functioning of tribunals and avoid delay in the dispensation of justice, the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 has been promulgated by the President of India through a gazette notification dated April 04, 2021. A bill to the same effect had been passed in the Lok Sabha in February and was pending in the Rajya Sabha, however, the ordinance was brought in despite assurances that the bill would be sent to a standing committee for a review in light of opposition.

The ordinance is seen as another step in the process of rationalisation of tribunals that began in 2015 . Through the Finance Act, 2017, seven tribunals had been abolished or merged based on functional similarity, however, the Act underwent various legal challenges for being passed as a Money Bill in violation of Articles 107, 110 and 117 of the Constitution Of India and being against the basic tenet of independence of judiciary.

The Finance Act, 2017 had empowered the central government to notify rules on qualifications of members, terms and conditions of their service, and composition of search-cum-selection committees for 19 tribunals (such as Customs, Excise, and Service Tax Appellate Tribunal). The ordinance amends the 2017 Act to include provisions related to the composition of search-cum-selection committees, and term of office of members in the Act itself as directed by the Supreme Court in the Rojer Matthew Case . However, the ordinance limits the term of members to 4 years disregarding the Supreme Court’s decision in the IPAB Case 3, which stipulated a minimum term of 5 years.

The ordinance primarily dissolves existing appellate bodies under 9 statutes including the Intellectual Property Appellate Board (“IPAB” or the “Appellate Board”) and transfers their functioning to the concerned High Courts, Commercial Courts/Commercial Division of High Courts, Registrars, Central Government etc.

The amendments introduced by the ordinance across various IP statutes have been detailed below:

Trade Marks Act, 1999

  • The IPAB which was set up under Section 83 of the Trade Marks Act, 1999 to hear appeals against the Trademarks Registrar’s decisions under the Act has been abolished.
  • The ordinance also transfers the powers of the Board to the High Court and transfers the pending cases before IPAB to the respective High Courts under whose jurisdiction the Appeal would have been ordinarily filed.
  • To dismantle the Board, the ordinance has deleted provisions related to the IPAB including the establishment (Section 83) and composition of the Tribunal (Section 84), Qualification (Section 85), Term of Office (Section 86), Salaries (Section 88), Resignation and Removal (Section 89), Procedure and Powers (Section 92) Condition on interim order (Section 95) Chairman’s power to transfer cases from one branch to another from the Act.
  • To transfer the power and function of the Board to the High Court, the ordinance has lifted the bar on the jurisdiction of the court by deleting Section 93 from the Act. It further deletes the definition of Appellate Board, Bench, Chairman, Judicial Member, Member, tribunal, and Vice-Chairman from Section 2 (1) of the Act.
  • The ordinance amends the definition of “prescribed” from “prescribed by rules made under this Act” to “(i) in relation to proceedings before a High Court, prescribed by rules made by the High Court; and (ii) in other cases, prescribed by rules made under this Act.”
  • The ordinance substitutes the term “Tribunal” with “the Registrar or the High Court” and “Appellate Board” with “High Court” wherever they occur in the Act.
  • The ordinance has also carried out amendments identical to the above in the Geographical Indications of Goods (Registration and Protection) Act, 1999 to dismantle the IPAB and transfer the powers and functions to the High Court.

Copyright Act, 1957

  • Appellate Board established under the Copyright Act, 1957, which was empowered, among other things, to hear appeals against the orders of the Registrar of Copyrights has been dismantled and replaced with Commercial Courts, a division of High Courts. To do so, the ordinance has deleted provisions related to the Appellate Board including its definition under Section 2 (aa) of the Act.
  • It defines “Commercial Courts” under Section 2 (fa) of the Act as “Commercial Court, for the purposes of any State, means a Commercial Court constituted under section 3, or the Commercial Division of a High Court constituted under section 4 of the Commercial Courts Act, 2015”. The newly added definition gives “Commercial Courts” the same meaning as it has under Section 4 of the Commercial Courts Act, 2015.
  • It has replaced the term Appellate Board with “Commercial Courts” wherever they occur in the Act, except for Section 50 of the Act in which the term “Appellate Board” has been replaced with “High Court”.
  • The power of the Appellate Board to hear appeals against the orders of the Registrar of Copyrights will now be vested with a Single Judge of the High Court. The Single Judge has also been empowered to refer the case to a larger bench if the Judge deems fit.
  • Since the amendment mandates that any proceeding before the High Court or the Commercial Division of the High Court including proceeding under section 31D of the Act for fixation of royalties shall be as per the rules prescribed by the High Court which in this case shall be Commercial Courts Act, 2015.
  • Since section 14 of the Commercial Courts Act mandates expeditious disposal of appeals, we can expect better management of the backlog of Copyright related commercial disputes in the near future.

Cinematograph Act, 1952

  • The ordinance has abolished the Appellate Tribunal formed under the Cinematograph Act, 1952 by deleting Section 2(h) of the Act.
  • It replaces the term ‘Appellate Tribunal’ under Section 7C of the Act with ‘High Court’. Hence, the power of the Tribunal which was empowered to hear appeals against decisions of the Censor Board has been transferred to the concerned High Court. As a result, such appeals shall now be filed directly before the concerned High Court.

Protection of Plant Varieties and Farmers’ Rights Act, 2001

  • The Plant Varieties Protection Appellate Tribunal formed under Section 54 of the Protection of Plant Varieties and Farmers’ Rights Act, 2001 has been dismantled.
  • The ordinance has removed the provisions related to the Tribunal including the definition of Chairman, Member, Judicial Member, establishment (Section 54), composition (Section 55), the procedure of the Tribunal.
  • The term “Tribunal” has been substituted with “High Court” wherever they appear in the Act.
  • As a result, the power of the Tribunal which was empowered to hear appeals against decisions of the Registrar of Plant Varieties Registry and Protection of Plant Varieties and Farmers’ Rights Authority has been transferred to the concerned High Court.
  • Now all such appeals shall be filed directly before the concerned High Court, and any pending cases shall be transferred to the concerned High Court.

Patents Act, 1970

  • The Appellate Board formed under Section 116 of the Patents Act, 1970 which was vested with the power to hear appeals under Section 117A of the Act against orders of the Controller General of Patents, Designs and Trade Marks (“CGPDTM”) or the Central government has been abolished.
  • Much like the above amendments, the ordinance omits provisions related to the Appellate Board such as establishment (Section 116) and composition of the Board (Section 117), Procedure and Powers (Section 117B and 117D).
  • To transfer the power and function of the Board to the High Court, the ordinance has lifted the bar on the jurisdiction of the court by deleting Section 117C from the Act.
  • Prior to the amendment both the High Court and Appellate Board were supposed to function simultaneously, however, now Appellate Board has been omitted from all of those places. Further, wherever only the Appellate Board appeared, it has been substituted with the High Court.

Apart from the amendments to the statutes specified above, a transitional provision has been made to compensate outgoing tribunal members for the premature termination of term and reversion of officers on deputation to parent cadre, Ministry or Department. In addition, any appeal, application or proceeding pending before the Tribunal, Appellate Tribunal or other authorities, other than those pending before the Authority for Advance Rulings under the Income-tax Act, 1961, shall stand transferred to the Court before which it would lie as per the ordinance, and the Court may proceed to deal with such cases from the stage at which it stood before such transfer, or from any earlier stage, or de novo, as the Court may deem fit. Moreover, the balance of all monies received by the abolished authorities and not spent by it as well as properties owned by it shall stand transferred to the Central Government.

CONCLUSION

Few may consider it as a notable change in IP dispute resoltion, others including the Group of Industry Associations on Intellectual Property have opined their dissatisfaction regarding the move. Nevertheless, since the Appellate Boards were formed to fast-track the backlog of cases, and they failed to meet the desired objective, it appears to be a prudent move by the Government. It should be however kept in mind that since the Indian Judiciary is infamous for backlog of cases, mere abolishment of the Appellate Tribunal will be futile unless the special commercial courts/benches are equipped to handle these cases. The substitution of the Appellate Board with the High Courts and Commercial Courts in relation to Copyright disputes also means the cost of instituting the proceedings before the respective judicial bodies will be decided in accordance with the Code of Civil Procedure, 1908 and the Commercial Courts Act, 2015.

The abolition of the Appellate Board poses another problem with respect to the royalty rates that are due to be revisited by the end of this year. The ordinance may have further complicated the entire procedure under Section 31D of the Copyright Act. This means any procedure prescribed under the Copyright Rules, 2013 in relation to the above proceeding gets nullified and we can expect the Central Government to exercise its power under Section 21A of the Commercial Courts Act, 2015 to frame rules akin to Rule 31 of the Copyright Rules, 2013.

The content of this Article does not necessarily reflect the views / position of Fox Mandal but remain solely those of the authors.

“Read about the changes introduced through the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021.”

Image Credits: Photo by freestocks on Unsplash

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