The Nuts and Bolts of Foreign Filing Licence (FFL) In India

Like any other IP right, a patent is also a jurisdictional right confined to the jurisdiction where the application is filed, and the rights granted. A patent is also considered a negative right, which enables the patentee to prohibit others from manufacturing, using, selling, and distributing the patented goods and services. If the invention is not protected in a specific jurisdiction, it can be used by any third party without restrictions. Hence, the applicants must choose jurisdictions carefully to safeguard their inventions in those countries.

Given that a patent is a valuable asset that can aid international business expansion, businesses must develop a foreign filing strategy. The strategy could be based on specific parameters like potential markets, manufacturing centres, competitors, emerging markets, and licencing opportunities to decide where to seek protection for their invention.

Apart from the specific parameters outlined above, the applicant must be aware of particular provisions of the Patents Act, 1970, which forbid Indian residents from filing patent applications outside India without first filing in India.

It is pertinent to note that, as an exception, a patent application can be directly filed outside India by an individual (Indian Resident) by seeking prior approval from the Indian Patent Office. This is referred to as a Foreign Filing Licence (FFL), as envisaged under Section 39 of the Indian Patent Act, 1970.

 

What is the objective of providing the option of a Foreign Filing Licence?

The primary objective of FFL is to analyse patent applications for sensitive technological information or subject matter to prevent the unauthorised export of valuable knowledge to foreign countries. The FFL assists the Indian Patent Office/government in determining the patent application’s sensitive subject matter (pertaining to defence or atomic energy). Once it is ascertained that there are no issues with disclosing the details of the invention to a foreign country, the Indian Patent Office usually grants the Foreign Filing Licence within 21 days of receiving the request.

When the applicant is not required to seek a Foreign Filing Licence
  • When the applicant is not a resident of India, and the invention was created outside of the country.
  • If the applicant is a resident of India who filed a patent application in India six weeks before filing a patent application in another jurisdiction.
When the applicant is required to seek a Foreign Filing Licence
  • When the applicant or inventor is a resident of India.
  • When the applicant does not wish to file a patent application in India before filing a patent application outside of India.
  • When the applicant is a resident of India, a patent application has been filed in India, but the six-week term has not yet expired.

It is important to note that if the invention is related to nuclear energy or defence, the Indian Patent Office may not issue the FFL without the prior consent of the Central Government.

 

Statutory provisions governing Foreign Filing Licence in India

Rule 71 of the Patent Rules, 2003 describes the procedure and mandates seeking permission to file a patent application outside India.  

Rule 71: Permission for filing patent applications outside India under section 39.

“(1) The request for permission to submit a patent application outside India shall be made on Form 25.

(2) The Controller must respond to a request made under sub-rule (1) within twenty-one days of the request being filed.

Provided that in the case of inventions relating to defence or atomic energy, the period of twenty-one days shall be counted from the date of receipt of consent from the Central Government.”

 

Requirements for Seeking a Foreign Filing Licence

Since the main objective of FFL is to examine the nature of inventions and technologies in the nation’s best interest, an applicant must sufficiently disclose the invention’s details, including the title, description, and drawings (if any). In addition to the above information, the applicant must submit the following forms with all required data.

Form-25[1]: to request permission to make a patent application outside India. Form 25 must include:

  • Title of the invention
  • Name, address, and nationality of inventors who are “resident in India,”
  • Name and address of the applicant if rights have been assigned to the applicant.
  • Names of foreign countries where the application will be submitted once the Foreign Filing Licence is issued.
  • Reason for making such an application.

Form-26[2]: Power of Attorney (POA) from the inventor(s) or applicant residing in India and appointing a patent agent to represent them.

 

Can a Foreign National Apply for a Patent in India?

As outlined above, an Indian Foreign Filing Licence is not applicable for foreign nationals filing a patent application in India. A foreign national may apply for a patent in India by following one of the two routes mentioned below:

  1. Paris Convention Route: Under the Paris Convention for the Protection of Intellectual Property, a foreign national of a convention country can use the convention route to file a patent application in India. Any invention filed in their home country may also be filed for patent protection in India within 12 months by claiming priority from the earliest filed application in their home country.
  1. Patent Cooperation Treaty (PCT) Route: A foreign national may also file a patent application in India under the PCT route.

However, if they intend to file a patent application directly in India, they must follow their country’s patent law to confirm if there is a similar requirement in their jurisdiction.

Even though FFL enables Indian residents to file patent applications directly in a foreign country without filing the first application in India, inventors and the applicants (who are Indian residents) must strictly comply with the requirements of the FFL discussed above to avoid serious consequences, including imprisonment for a term of up to two years, or a fine, or both.

Even though Foreign Filing Licence (FFL) enables Indian residents to file patent applications directly in a foreign country without filing the first application in India, inventors and the applicants (who are Indian residents) must strictly comply with the requirements of the FFL discussed above to avoid serious consequences, including imprisonment for a term of up to two years, or a fine, or both.

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Anticipation of Invention: Patent and Latent Threats

A patent is representative of a quid pro quo arrangement and on the basis thereof patentees are granted a monopoly over their inventions. However, the process of securing such a monopoly can be complicated by ‘anticipation.’ Any invention anticipated in a prior art is most likely to be invalidated or made ineligible for a patent grant. This is because anticipation signifies a lack of ‘novelty’ in the claimed patent.

The concept of anticipation varies across jurisdictions, generally differing on the offering of the grace period. For instance, in the US a one-year grace period is provided to an individual for filing a disclosure in the event of obtaining the confidential subject matter of the invention directly or indirectly by the inventor or the joint inventor. Here, the principle of relative novelty governs the consideration of anticipation. Whereas in Europe, only a six-month grace period is provided, only in cases where the information is obtained by deceit or has been made public through an official international exhibition.

The law in India has taken an alternative route. The Indian Patent Act, of 1970 has identified conditions in which the grace period is afforded to evaluate anticipation. The Act defines what does not constitute anticipation under sections 29-34.

This article aims to provide the reader with a better understanding of the concept of anticipation under the Indian Patent Act, 1970.

 

What Amounts to Anticipation for Patents in India?

 

As highlighted above, the term anticipation is not defined in the Indian Patent Act,1970 however, the Act specifies what is not considered anticipation under Chapter VI, Section 29-34.

In the case of M. C. Jayasingh vs Mishra Dhatu Nigam Limited,[1] the Madras High Court while examining the provisions pertaining to “Anticipation” under the Indian Patents Act 1970, observed inter alia, “Though Section 13(1) refers repeatedly to “anticipation”, the expression “anticipation” is not defined in the Act. But, Chapter VI, containing Sections 29 to 32, deals with anticipation by previous publication. Here again, there is an element of confusion. Sections 29 to 32 do not stipulate as to what constitutes anticipation by publication. Rather, these sections merely point out what would not constitute anticipation. While Section 29 indicates what is not anticipation by previous publication, Section 30 indicates that a mere communication of the invention to the Government may not constitute anticipation. Similarly, Section 31 indicates when a public display would not constitute anticipation, and Section 32 indicates when the public working of a patent would not constitute anticipation.”

The Court proceeded to observe that a conclusive meaning of anticipation could be deciphered by examining the expression “new invention” under section 2(1)(l). Hence, the anticipation by publication would simply mean “that the subject matter had either fallen into the public domain or had become part of the state of the art.” This understanding of anticipation is further circumscribed by the exclusions mentioned under Sections 29 to 32.

It is pertinent to note that the concept of anticipation does not necessarily prevent an inventor from doing something purely because it would be an obvious/anticipated extension of what had been known in the art before the priority date. It rather demands a deep deliberation and analysis of what would have been obvious or already in use at the priority date to an individual skilled in the art who had access to what was known in the art at that date.

Anticipation by Previous Publication (Section 29)

 

This section provides that any publication of the invention made in India or abroad without the prior consent of the applicant or patentee is not considered anticipation and the ground for rejection of the patent. The patentee must establish that he filed an application for the patent as soon as he found out about the publication. This section does not mention about the time period of filling the application after such a publication.

The law on anticipation by prior publication has been summarised by Sachs LJ in the case of General Tire & Rubber Company v. The Firestone Tyre and Rubber Company Limited And Others,[2] as, “If the prior publication contained a clear description of, or clear instructions to do or make, something that would infringe the patentee’s claim if carried out after grant of the patentee’s patent, the claim would be anticipated. If, on the other hand, the prior publication contained a direction which was capable of being carried out in a manner which would infringe but would be at least as likely to be carried out in a way which would not do so, the patentee’s claim would not be anticipated, although it might fail on the ground of obviousness. To anticipate the claim, the prior publication had to contain clear and unmistakable direction to do what the patentee claimed to have invented.”

 

Anticipation by Previous Communication to the Government (Section 30)

 

Any disclosure of the invention to the government prior to the filing date of a patent application for the purpose of the investigation is not considered anticipation.

Moreover, in Shogun Organics Ltd. Vs. Gaur Hari Guchhait & Ors[3], the Delhi High Court clarified that the language of Section 30 now makes it clear that the disclosure to a government department or to any other authority, not just of the patentee, but by any other person, would not constitute prior publication. The language is person-neutral. It cannot be said from a reading of the provision that only disclosure by the patentee/applicant is covered under Section 30. 

 

Anticipation by Public Display (Section 31)

 

 An invention that has been displayed or published publicly is not eligible to be patented on the account of lacking novelty. However, under certain circumstances, a publicly displayed patent can be considered ‘novel’ in the following cases:

  1. The display or use of invention at an industrial or other exhibition is notified by the Central Government in the Official Gazette;
  2. Publication of any description or portion thereof as a result of the exhibition’s display or use of the invention;
  3. Usage of the invention by anyone, after the aforesaid display in exhibition, other than the inventor or a person deriving title from him; and
  4. Description of the invention in a paper read by the inventor before a learned society.

It is important to note that, an application for a patent can only be granted in the abovementioned circumstances if it is filed within 12 months of such public display/publication.

In Ralph M. Parsons Co (Beavon’s) Application[4], it was observed that learned societies would disseminate the relevant learning without consideration of economic gain. Thus, a learned society would normally be a non-commercial body of people and would not typically be associated with commercial exploitation. For a publication to be regarded as a “transaction” of a learned society, it must be published under the auspices of and finally be the responsibility of the learned society. Therefore, a publication that occurs via a third party, such as a reporter who is present at the conference, would not be regarded as a publication by society. Moreover, the publication by a society of an abstract of a paper is considered to be a publication of a paper.[5]

 

Anticipation by Public Working (Section 32)

 

An invention filed in a patent application is not considered to be anticipated due to the working of the invention in public by the patentee or person deriving title from him or any person authorized by him, subject to the meeting of the following criteria:

  1. The working of the invention should not be public prior to 1 year from the date of filing of the patent application; and
  2. The working of the invention in public is performed for the purpose of reasonable trial.
  3. The nature of the invention needs the invention to be worked in public.

Hence, the 12 months time period mentioned in the provision can be regarded as the ‘grace period’ for the inventor to file an application for the grant of the patent after public use. This is an opportunity for the inventor to apply for the grant of patent in an event of him mistakenly or in good faith using the invention in the public domain.

It is pertinent to note that, the section draws a significant distinction between public use and mere public publication.

In the case of Poysha Industries Ltd v. Deputy Controller of Patents and Designs[6], the Calcutta High Court adjudicated upon the issue of distinction between public use and public knowledge. The issue was whether the invention was publicly used or publicly known in a part of India. The Appellants, in support of their contention, stated that the method used by them to crimp the top portion of the containers did not require special skills or techniques. The said containers had been supplied by the appellants to M/s Zandu Pharmaceuticals and another company since 1960. However, the appellants failed to establish that the invention was publicly used and known, hence the appeal failed.

The same has been further clarified in Monsanto Co v. Coramandal Indag Products (P) Ltd.[7] by the Supreme Court, wherein it was held that, “It is clear from the facts narrated by us that the Herbicide CP 53619 (Butachlor) was publicly known before Patent Number 125381 was granted. Its formula and use had already been made known to the public by the report of the International Rice Research Institute for the year 1968. No one claimed any patent or any other exclusive right in Butachlor. To satisfy the requirement of being publicly known as used in clauses (e) and (f) of [s 64(1)], it is not necessary that it should be widely used to the knowledge of the consumer public. It is sufficient if it is known to the persons who are engaged in the pursuit of knowledge of the patented product or process either as men of science or men of commerce or consumers. The section of the public who, as men of science or men of commerce, were interested in knowing about herbicides which would destroy weeds but not rice, must have been aware of the discovery of Butachlor. There was no secret about the active agent Butachlor as claimed by the plaintiffs since there was no patent for Butachlor, as admitted by the plaintiffs. Emulsification was the well-known and common process by which any herbicide could be used. Neither Butachlor nor the process of emulsification was capable of being claimed by the plaintiff as their exclusive property. The solvent and the emulsifier were not secrets; they were admittedly not secrets and were ordinary market products. From the beginning to the end, there was no secret and there was no invention by the plaintiffs. The ingredients, the active ingredient, the solvent and the emulsifier, were known; the process was known, the product was known, and the use was known. The plaintiffs were merely camouflaging a substance whose discovery was known throughout the world and trying to enfold it in their specification relating to Patent Number 125381. The patent is, therefore, liable to be revoked.

Therefore, for information to be publicly known, it is not essential that it should be used widely or be in the knowledge of the general public only. It would satisfy the legislative purpose if the information was known to individuals engaged in the research of the patented product or operating within the same industry or science.

 

Anticipation by Use and Publication after Provisional Specification (Section 33)

 

The objective of this section is to clarify that the information disclosed in public or the invention worked in public is not considered for anticipation between the filing of:

  1. A patent application with a provisional specification and a complete specification (within 12 months from the provisional filing); or
  2. A priority application in a convention country and a convention application in India.

This means that if the invention is used or published after the provisional application is filed, a complete specification filed later is not deemed to have been anticipated. Therefore, the Controller cannot refuse to grant a patent, revoke or invalidate it by citing that the subject matter of the provisional specification was used or published in India or in another jurisdiction at a time after the filing of said specification.

It is important to note that the provision applies only if the complete specification of the patent is filed within 12 months of the provisional specification.

Further, in cases where the complete specification has been filed in pursuance of a convention application, the Controller cannot reject the grant of patent on the grounds that the subject matter of the application was filed for protection in India within 12 months from the date of priority application filed in the convention country.

This section essentially seeks to safeguard the interests of the inventors between the periods of filing of provisional and complete specifications, and between the periods of filing the priority application in the convention country and the filing of the complete specification in India, in an event where the subject matter of the invention is placed in the public domain.

 

The Doctrine of Inherent Anticipation

 

The doctrine of inherent anticipation refers to a kind of anticipation wherein anticipation is found even in the absence of appropriate disclosure in a prior art reference.

In general, anticipation can be of two types: explicit anticipation and implicit anticipation (i.e., the doctrine of inherent anticipation). The term explicit anticipation refers to anticipation wherein each technical element disclosed in the claim is disclosed in a single prior-art document. According to the explicit anticipation, a claim is rejected by the patent office if all the technical features are found in a single prior art document. According to the doctrine of inherent anticipation (i.e., implicit anticipation), a claim is rejected by the patent office even if all the technical features are not disclosed in a single prior art subject to the presence of the missing technical features inhere in the prior art. 

Generally, there are two accepted tests to appropriately understand the doctrine of inherent anticipation. According to the first test, a check is performed to determine that the inherency of anticipation is not established only based on the probabilities or possibilities. A technical feature is considered to be inherent only if said technical feature is the “natural result flowing from” the invention description and invariably leads to the outcome. According to the second test, a check is performed to determine that an accidental or unintentional outcome, not appreciated as inherent to the claim by a person of ordinary skill in the art, does not constitute anticipation.

The IPAB in Enercon (India) Limited vs. Aloys Wobben[8] held that “patent is invalid for anticipation if a single prior art reference discloses each and every limitation of the claimed invention. The prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in the single anticipating prior art. It is not necessary that inherent anticipation requires that a person of ordinary skill in the art at the time would have recognised the inherent disclosure. But it is necessary that the result be a necessary consequence of what was deliberately intended in the invention.”

 

Overcoming Anticipation Rejection

 

In view of the above, it is always advisable to file a patent application before placing it in the public domain. If the nature of the invention requires the invention to be placed in the public domain or worked in the public domain, the inventor(s) must ensure compliance with the requirements outlined in Section 29-30 in order to maintain the novelty of the invention and avoid patent rejection due to anticipation.

References:

[1] Civil Suit No.562 of 2007

[2] [1972] R.P.C. 457

[3] CS (COMM) 201/2017: (14.08.2019 – DELHC):MANU/DE/2598/2019: 2019 SCC OnLine Del 9653:Delhi High Court

[4] [1978] FSR 226

[5] Ethyl Corporation’s Patent [1963] RPC 155

[6] AIR 1975 Cal 178

[7] AIR 1986 SC 712

[8] ORA/6/2009/PT/CH ,ORDER (No. 18 of 2013)]

 

 

Image Credits: Photo by JESHOOTS.COM on Unsplash

Anticipation can be of two types: explicit anticipation and implicit anticipation (i.e., the doctrine of inherent anticipation). The term explicit anticipation refers to anticipation wherein each technical element disclosed in the claim is disclosed in a single prior-art document. According to the explicit anticipation, a claim is rejected by the patent office if all the technical features are found in a single prior art document. According to the doctrine of inherent anticipation (i.e., implicit anticipation), a claim is rejected by the patent office even if all the technical features are not disclosed in a single prior art subject to the presence of the missing technical features inhere in the prior art. 

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Demystifying the Inventorship Rights of an AI System in India

In this age of technological advancement, Artificial Intelligence (AI) has taken a giant leap from undertaking more straightforward tasks to originating marvellous inventions. Can an AI system be considered an inventor? This question has been beguiling jurisprudence across the globe for a considerable time. However, through the recent decision of Thaler v. Commissioner of Patents, the Australian Federal Court has forced jurisdictions across the world to re-think the inventive capacity and the role of AI in the contemporary ecosystem of innovation.

Through this article, we have tried to determine the implications of the Thaler decision and examine the position of the Indian legislation on the inventorship rights of an AI.

Factual Matrix

Dr. Stephen Thaler designed the Device for Autonomous Bootstrapping of Unified Sentience (DABUS). DABUS is an artificial intelligence system that pioneered the creation of an optimised beverage container and a flashing light for use in emergency circumstances. In the persistence of such a creation, Dr. Thaler filled patent applications worldwide, including in Australia, Canada, China, Europe, Germany, India, Israel, Japan, South Africa, the United Kingdom, and the United States.

“The Deputy Commissioner” rejected Dr. Thaler’s patent application in Australia, which named DABUS as the inventor. The matter was contested and finally, the Federal Court of Australia determined that the AI could be recognised as an inventor under the Australian Patent Act. According to the Court, the patent would be owned by Dr. Thaler, the developer, owner, and controller of DABUS. The Court determined that the legislative intent was to encourage innovation and that nothing in the Patent Act expressly or implicitly forbids AI from being named as an inventor.

Indian Stance: Inventorship Rights of an AI

In India, recently, the Controller General of Patents recorded objections to recognising an AI as an inventor in the matter of patent application numbered 202017019068, citing the provisions under Section 2 and Section 6 of the Patents Act 1970 (“Act”). The term “inventor” has not been defined under the Act. However, Section 6 states that, among other things, a patent application can be filed by any person claiming to be the true and first inventor of an invention.[1]

A bare reading of the provisions indicates that a natural person is distinguished from others. One can also observe that anyone other than a natural person will be unable to claim inventorship. Consequently, a natural person who is true and first to invent, and who contributes his originality, skill, or technical knowledge to the innovation meets the criteria to be acknowledged as an inventor in India.

In the case of V.B. Mohammed Ibrahim v. Alfred Schafranek, AIR 1960 Mysore 173, it was held that a financing partner cannot be an inventor, nor can a corporation be the sole applicant that claims to be an inventor. The Court, through this decision, emphasised that only a natural person (who is neither a financing partner nor a corporation) who genuinely contributes their skill or technical knowledge towards the invention shall qualify to claim inventorship under the Act.

In the light of this judgement, it can be perceived that an AI can also contribute its skill or technical knowledge to an invention and become an inventor. However, a reference to Som Prakash Rekhi vs Union of India & Anr, AIR 1981 SC 212, clarifies the qualification of a legal ‘person’ under Indian law. The Supreme Court observed that ‘personality’ is the sole attribution of a legal person. Such a ‘personality’ is an entity that has the right to sue or can be sued by another entity. An AI is not capable of using such rights, nor can it perform the required duties of any juristic personality independently. For instance, it cannot enter into an agreement or transfer or acquire patent/patent application rights. It would also be impossible for an AI to oppose or revoke a patent application. Hence, an AI falls short of the standards for being deemed an inventor in India.

Furthermore, the legislative intent behind the Indian Patent Act as found in the Ayyangar Committee report of 1959[2] suggests that inventors are mentioned in a patent application as a matter of right. Whether or not the actual deviser has a proprietary claim on the innovation, he has a moral right to be acknowledged as the inventor. This confers reputation and boosts the economic worth of the inventor. The inventor may give up his ownership interest in a particular patent due to a contract/agreement in law, but he retains his moral right.

An examination of legislative purpose and current public policy reveals a desire to protect the rights of the inventor/natural person who creates IP and can use his moral rights. On the other hand, AI cannot be granted moral rights nor appear to enjoy the benefits intended by legislation or public policy. Given this, designating AI as an inventor/co-inventor under current Indian rules seems impossible until explicit revisions are made.

Role of AI and Economic Growth in India

The Parliamentary Standing Committee “(“Committee“”) constituted under the Dept. of Commerce, analysed the current landscape of the IPR regime in India and observed its contribution to promoting innovation and entrepreneurship in the country in its report titled “Report 161: Review of the Intellectual Property Rights Regime in India” presented in the Rajya Sabha on  July 23rd, 2021. In particular, it examined the challenges that exist in the current legislative structure including the inventorship rights of an AI.

The Committee acknowledged the relevance and utility of AI-based cutting edge technology and machine learning, particularly in current times, significantly affected by the pandemic, in which digital technology proved to be instrumental in responding to the global crisis. Further, the Committee placed reliance on a report released by Accenture titled “How AI Boosts Industry Profits and Innovation” which estimated AI to inject US $ 957 Billion into the Indian Economy by 2035, if used optimally, to understand further the impact and role of AI and technology in the contemporary landscape and its relationship with Intellectual Property. 

Therefore, the Committee recommended a review of the relevant provisions of the Indian Patents Act, 1970 [Section 3(k)] and the Copyrights Act, 1957 on a priority basis to afford inventorship rights to AI in India. The Report also stated that “The Committee recommends the Department that the approach in linking the mathematical methods or algorithms to a tangible technical device or a practical application should be adopted in India for facilitating their patents as being done in the EU and U.S. Hence, the conversion of mathematical methods and algorithms to a process in this way would make it easier to protect them as patents“. Thereby including algorithms and mathematical processes under the ambit of patent law.

The Committee concluded that the legislative framework amendments would protect the works of an AI (either autonomously or with assistance/inputs from a human), incentivize pioneering inventions and R&D in the country, and maintain an enabling ecosystem for the protection of human intelligence innovations. The Committee maintained that the embargo placed on the inventorship rights of an AI would dissuade significant investments in the sector since such AI induced innovations would not be protected in the country.

Conclusion:  A Way Forward for Inventorship Rights of an AI System 

The decision would have a favourable impact on the holder of an AI. However, commentators have expressed concerns regarding the difficulties that may arise due to the extending of patent protection to AI-generated concepts, such as:

  • Impact on the Copyright law: A result of such a decision may lead the courts to re-examine the subject of AI authorship and regard AI as a creator of AI-generated works, which will open a Pandora’s box of judicial conflicts.[3]
  • It could potentially raise the bar for innovation or fundamentally alter the definition of a ‘person skilled in the art,’ making it more difficult for human innovators to obtain patent protection.
  • Accepting inventorship to include AI systems would elevate AI to the status of a legal person, allowing it to hold and exercise property rights.
  • It raises concerns about who has the right to use or own the AI-created product. As the AI system is not a legal body, it cannot enter into agreements allowing it to transfer its inventorship rights.

The ability of an AI to be an inventor under patent law will be determined by the specific language in each jurisdiction’s patent laws. To explicitly incorporate and recognise AI-generated ideas, legislative changes and amendments may be required in nations where plain statutory wording needs an inventor to be a natural person. In places where the statutory language is less explicit, such as Australia, the courts may have additional freedom to consider purposeful statutory interpretation and policy considerations.[4] We anticipate that all IP offices adopt a unified approach to successfully address the emerging difficulties posed by inventions by AI.

References: 

[1] Section 6, the Patents Act, 1970.

[2] Shri Justice N. Rajagopala Ayyangar, Report on the revision of the patents law, 1989.

[3] Rita Matulionyte, Australian court says that AI can be an inventor: what does it mean for authors? Kluwer Copyright Blog (September 2021).

[4] Lam Rui Rong, Can Artificial Intelligence Be an Inventor Under Patent Law? Australian Federal Court Says ‘Yes’ but U.S. District Judge Says ‘No’, SKRINE (September 2021).

Image Credits: Photo by Gerd Altmann from Pixabay 

The ability of an AI to be an inventor under patent law will be determined by the specific language in each jurisdiction’s patent laws. To explicitly incorporate and recognise AI-generated ideas, legislative changes and amendments may be required in nations where plain statutory wording needs an inventor to be a natural person. In places where the statutory language is less explicit, such as Australia, the courts may have additional freedom to consider purposeful statutory interpretation and policy considerations.

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The Messi Exit: A Legal & Financial Perspective

Behind the passions of the fans, tackled goals, swanky parties and brand endorsements, there is a lot that goes into structuring a football team/club, registration as well as the transfer of a player while maintaining sustainable finances. 

In response to multiple financial irregularities in clubs such as Deportivo La Coruña, Racing Santander, Valencia, Real Zaragoza, Real Mallorca, Albacete, Real Betis etc., the economic control framework was introduced in 2013 to keep clubs financially afloat and maintain competitive sustainability.

At a later stage, FFP (Financial Fair Play) came into effect against errant clubs for breach of regulations. Spain’s economic control- La Liga controls the fire before it can damage (to an extent) by setting a limit to the amount a club can spend, thereby making it easier to stay within limits and preventing the creation of unsustainable debts. 

What were the legal reasons for Messi’ s exit from Barcelona?

 

Recently Argentinean professional footballer Lionel Andrés Messi, popularly known as Leo Messi, decided to part ways with the Spanish football club FC Barcelona and join the French football club Paris Saint-Germain. Messi had been with the Spanish club for the last 21 years and their association came to an end on 30th June 2021, when they decided to move on.

Messi had agreed to a new five-year contract with Barcelona, however on 8th August 2021, the legendary football player announced his exit from the Spanish club, by signing a two-year contract with the French club Paris Saint-Germain, with the option of further extension up to a year. FC Barcelona announced that despite the agreement between the club and Messi, they were not able to honour the new contract due to the Spanish football league’s (LaLiga’s) financial fair-play rules. 

 

What is LaLiga Financial Fair-play Rule? 

 

Under the LaLiga fair play rule, each club is provided with a cost limit for each season, which includes the wages of the players, the coaching staff, physios, reserve teams, etc. Clubs have the flexibility to decide how the wages are distributed, as long as the overall limit is not breached. Factors taken into consideration for setting the financial cap are inclusive of expected revenues, profits and losses from previous years, existing debt repayments, and sources of external financing among others. In this case, the Catalan club could not accommodate Messi’s contract within the financial limit for the upcoming year, even though Messi was allegedly willing to take a 50% pay cut. 

Considering the fact that Messi is Barcelona’s record scorer with 751 goals and 10 La Liga titles, Messi’s exit could mean a heavy blow for the world’s most valuable[1] European football club. 

A football clubs’ main revenue is generated from TV broadcasting rights, matchday sales, and commercial revenue which includes sponsorship contracts, merchandising sales, and digital content that the club creates. It is too early to say whether Messi’s departure will have an impact on how Barcelona performs in the ongoing season. However, there is no question over how Messi has played an important role in bringing laurels to Barcelona over the past few years, which has garnered a significant fan following, not just for the footballer, but also for the club. Thus, his exit may likely cause a dip in the viewership and fan following which will directly affect the Club’s revenue.

Typically for a footballer, his contract with any club would include basic salary, signing-on fees, royalty fees, and objectives based on games. Apart from these, some of the other key element included in a contract is his image rights, merchandising right and licensing deals, which form a major portion of any footballer’s gross income. 

 

What are Image Rights? 

Image rights are the expression of a personality in the public domain. For an athlete, it will include their name, photo, and likeness, signature, personal brand, slogans, or logos, etc. Generally, football clubs try to extract a greater percentage from the image rights of a player, in a club capacity as compared to their personal capacity. Club capacity is usually when the image rights of the player are used in connection with or combined with his name, colours, crest, strip, logos identifying him as a player for his club. Personal capacity is usually when the player is appearing in and conducting activities outside his role as a player at the club. 

Any player leaving the club would have an impact on the commercial revenue generated by the club in the form of sponsorship contracts, merchandising sales as well as digital content. This would be especially notable for a player like Messi, whose personal brand value boasts over 130 trademarks. Messi’s trademark portfolio consists of mostly a single class trademark in his home country of Argentina, with others filed or registered in China, Brazil, EU, Malaysia, UK, Spain, Canada, Chile, and the US. The most common goods and services represented in Messi’s trademark portfolio are class 25 (clothing and footwear), class 28 (games, toys, and sporting apparatus) and class 9 (computer software). Apart from the above classes, class 18 has been filed in multiple applications.

The trademark consists of either the word mark MESSI/LIONEL MESSI or his logo. This means that Barcelona will no longer be able to use the footballer’s name or logo for apparel and merchandise sales, which will directly impact its revenue as most clubs collect a portion of the sales revenue. Also, Messi’s exit means that the club will have no control over his image rights to attract corporate sponsorships. Further, Messi’s huge online presence, with over 276 million Instagram followers, which is more than double of Barcelona’s official account (100 million), will have a direct impact on any advertising or publicity that the club may generate. 

A player of Messi’s stature, brand, and persona is significant to any club. How the present scenario is played with the new club and how much impact Messi’s presence will bring to Paris Saint-Germain is yet to be seen. 

A football clubs’ main revenue is generated from TV broadcasting rights, matchday sales and commercial revenue which includes sponsorship contracts, merchandising sales and digital content that the club creates. It is too early to say whether Messi’s departure will have an impact on how Barcelona performs in the ongoing season.

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A Brief Analysis of the Patents (Amendment) Rules, 2019

The Government of India, Ministry of Commerce and Industry (Department for Promotion of Industry and Internal Trade) vide its notification dated September 17, 2019, has published the Patents (Amendment) Rules, 2019[i] (hereinafter the “Rules”) amending the Patents Rules, 2003 (hereinafter the “Principal Rules”). The amendment came into force from the date of notification.

 

The Government of India, Ministry of Commerce and Industry (Department for Promotion of Industry and Internal Trade) vide its notification dated September 17, 2019, has published the Patents (Amendment) Rules, 2019[i] (hereinafter the “Rules”) amending the Patents Rules, 2003 (hereinafter the “Principal Rules”). The amendment came into force from the date of notification.

 

The highlights of the amendments are as follows:

 

  1. Rule 6: Leaving and serving documents

 

The amended Rules substitute Rule 6 (1-A) with the following:

“Notwithstanding anything contained in sub-rule (1), a patent agent shall file, leave, make or give all documents only by electronic transmission duly authenticated:

Provided that any document, if asked to be submitted in original, shall be submitted within a period of fifteen days, failing which such documents shall be deemed not to have been filed.”

 

Analysis: This amendment is brought to reduce the burden of submission of scanned copies of original documents subsequent to the filing of the same online. The amendment clarifies that the original copies are required to be submitted only when requested by the Indian Patent Office, within 15 days from the date of request.

 

  1. Rule 7: Fees

 

The amended Rules substitute the second proviso of Rule 7(1) with the following:

“Provided further that in the case of a small entity, or startup, every document, for which a fee has been specified, shall be accompanied by Form-28.”

 

Analysis: Again, this amendment is merely clarificatory in nature with respect to the filing of Form 28 along with documents that specify fee. In the principal rule, the provision existed only for small entities and the word ‘startup’ was not expressly mentioned. However, it was already in practice i.e. the patent office required Form 28 to be submitted with documents requiring fee even for startups.

 

  1. Rule 24-C: Expedited examination of applications

 

The amended Rules substitute Rule 24C(1)(b) with the following:  

“(b) that the applicant is a startup; or

(c) that the applicant is a small entity; or

(d) that if the applicant is a natural person or in the case of joint applicants, all the applicants are natural persons, then the applicant or at least one of the applicants is a female; or

(e) that the applicant is a department of the Government; or

(f) that the applicant is an institution established by a Central, Provincial or State Act, which is owned or controlled by the Government; or

(g) that the applicant is a Government company as defined in clause (45) of section 2 of the Companies Act, 2013 (18 of 2013); or

(h) that the applicant is an institution wholly or substantially financed by the Government;

Explanation:- For the purpose of this clause, the term ‘substantially financed’ shall have the same meaning as in the Explanation to sub-section (1) of section 14 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971(56 of 1971); or

(i) that the application pertains to a sector which is notified by the Central Government on the basis of a request from the head of a department of the Central Government.:

 Provided that public comments are invited before any such notification; or

(j) that the applicant is eligible under an arrangement for processing a patent application pursuant to an agreement between Indian Patent Office and a foreign Patent Office.

Explanation: – The patentability of patent applications filed under clause (j) above will be in accordance with the relevant provisions of the Act.”

 

Analysis: The Principal Rules had provision for expedited examinations only in case of startups and international applications where India was a competent searching/examining authority, however, that has been amended to include additional categories of applicant such as small entity, natural person(s) having at least one female applicant, institution or department of Government or controlled by Government. Also, Government companies, institutions wholly or substantially financed by the Government, sectors notified by the Government and applicants eligible under an agreement with a foreign patent office can also file for expedited examination. This amendment will motivate other categories of applicants to have fast track examination of patent applications for early grant of patent.

 

Further, in order to accommodate the said categories, the corresponding Form 18A has been amended.

 

  1. First Schedule: Transmittal Fee & Certified copy fee towards filing an International Patent Cooperation Treaty (PCT) application

 

The amended Rules add:

  1. If the PCT application is filed online, the applicant is not required to pay any fee towards the Transmittal fee. Earlier applicants were required to pay fees ranging from 3200 to 16000. The fees for physical filing remain unchanged.
  2. If a request is filed for preparation of a certified copy of priority document and sharing the same via e-transmission through WIPO DAS, the applicant is not required to pay any fee for the same. Earlier applicants had to pay fees ranging from 1000 to 5000. The fees for physical filing remain unchanged.

 

The amendment in the Rules, especially the expansion of the expedited examination system, would augment the government’s patent prosecution highway (PPH) program that intends to harmonize the patent examination standards and encourage the filing of patent applications in India. In September 2018, after the Second JPO- DIPP Review Meeting in August 2018, the Japan Patent Office (JPO) and the Department of Industrial Policy and Promotion (DIPP) had agreed in principle, to start a bilateral PPH program on a pilot basis in certain identified fields of inventions in the first quarter of fiscal year 2019.[ii] The amendment seems to be a result of the agreement and the intention of improving the overall IP environment of the country. Additionally, the waiver of the transmittal and certified copy fees would also increase the filing of PCT applications and facilitate the ease of doing business in India.

The amendment in the Rules, especially the expansion of the expedited examination system, would augment the government’s patent prosecution highway (PPH) program that intends to harmonize the patent examination standards and encourage the filing of patent applications in India. In September 2018, after the Second JPO- DIPP Review Meeting in August 2018, the Japan Patent Office (JPO) and the Department of Industrial Policy and Promotion (DIPP) had agreed in principle, to start a bilateral PPH program on a pilot basis in certain identified fields of inventions in the first quarter of fiscal year 2019

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