IP IN INDIA
market for a limited period and earn fi nancial rewards from the patented product. However, the grant of a patent does not always equate to an asset for the owner. Liability can be in the form of costs involved in prosecuting a patent application, which are increasing at a fast pace; the money spent on protecting the patent rights against infringement; and money spent fi ghting invalidation challenges. We cannot say much about statutory fees
for the grant of patents as they are a part of administrative policy, but the probability of any litigation and costs incurred in such litigation is always considered a liability for a business. A recent increase in patent litigation in India
shows that patent owners and their competitors are ready to fi ght tooth and nail either to prevent the infringement of patents or
to
invalidate them. With the increase in litigation, the cost of fi ghting lawsuits has also increased by leaps and bounds. T erefore, patent owners should evaluate the commercial value of their inventions before seeking a statutory monopoly to ensure that money is not exhausted in pursuing academic inventions. In India, in order to ensure that patentees are
not harassed unnecessarily by vested parties, the Supreme Court of India, in Dr Alloys Wobben Yogesh Mehra (2014), limited the opportunities for a party to seek the revocation of a patent in diff erent forums. T e court held that if a party has fi led a post-grant opposition then it is not entitled to fi le a revocation petition or a counterclaim to infringement. Similarly, a challenger is also
barred
from pursuing various statutory remedies simultaneously—ie, seeking revocation of a patent by fi ling a revocation petition as well as a counterclaim to an infringement suit before a high court. T e Supreme Court has not only devised a unique technique for reducing the fi nancial liability attached to a patent, by cutting down litigation expenses for a single patent, but also provided a judicial shield to protect a patent by reducing the risk of repeated challenges to its validity on the same ground by any unscrupulous competitor. Another evolving line of jurisprudence may
become an additional factor in evaluating the value of a patent. T is came from the UK Supreme Court in the case of Virgin Atlantic Airways v Zodiac Seats UK (2013), where the court overruled the earlier UK legal position that a patentee whose patent has been revoked can still claim damages for its earlier infringement. It was also observed by Lord Neuberger
that a defendant can also seek the recovery of
damages already paid by the subsequent revocation of
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relying on the patent.
“PATENT OWNERS SHOULD EVALUATE THE COMMERCIAL VALUE OF THEIR INVENTIONS BEFORE SEEKING A STATUTORY MONOPOLY.”
Neuberger’s observation, if followed and accepted as settled law, may provide diffi culties for patent owners because they will never be sure whether damages awarded to them for infringement will become a future liability (if their patent is revoked). Research indicates (according to an article on
Forbes) that about 70% to 80% of a company’s market capitalisation comes in the form of intangible assets, which include patents, trademarks, copyright, and other business knowledge and know-how. Patents are now moving from having a legal to a strategic management role and every entity must form a strategy to exploit its patent portfolio to recoup the costs incurred by fi ling and protecting patent rights. But one should not be oblivious to the liabilities attached to a patent, such
as
prosecution costs, costs of infringement actions and invalidity challenges, and any later liabilities arising from claiming damages.
A competitor will always try to invalidate a patent but the patent owner is responsible for enforcing its own patents, so if the owner wants to stop another party from infringing the patent it has to do so at a cost. It is therefore advisable to apply for an
invention only if the inventor is confi dent about its inventiveness, commercial viability and novelty. Simply owning a patent does not mean automatic revenue and therefore an applicant should be confi dent about the actual industrial applicability of the invention in question. Patenting too early without actual knowledge
of the utility of the invention’s subject matter will result in huge fi nancial implications for an applicant in the future. T erefore, every potential patent owner should ask whether the commercial value of an invention it seeks to protect is more than the fi nancial liability that may be attached to the costs of obtaining a patent and preventing it from unauthorised exploitation. If
strategic approach should be adopted towards fi ling, prosecuting and obtaining a patent in order to ensure that it is ‘strong’. Overall, an applicant should streamline its
evaluation of the invention and aim to achieve clarity on the scope of the patent (therefore avoiding broad, premature and unsupported claims), its utility (with actual data establishing effi cacy, etc), and its commercial exploitation. Further, a patentee should always endeavour to take swiſt and timely steps for the effi cient enforcement of its patent rights. T e views expressed in this article are those of the authors and do not necessarily represent the views of, and should not be attributed to, the fi rm.
the answer is “yes”, a careful
Ashutosh Kumar is a senior associate at Singh & Singh Lall & Sethi. He completed a Master’s degree in intellectual property at University College London, and is now and competition law. He can be contacted at:
akumar@indiaip.com
Saurabh Anand is an associate at Singh & Singh Lall & Sethi. He is prosecution. He can be contacted at:
sanand@indiaip.com
World Intellectual Property Review May/June 2015
69
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