In an ideal world the patent office's role should be limited to administrative activities i.e. the examination and grant of patents. We don't live in an ideal world. The Indian Patent Office not only decides on patent applications but has also found itself burdened with the additional functions of deciding both pre-grant & post-grant patent oppositions apart from granting compulsory licences targeted at remedying anti-competitive activities of patentees. The fundamental question that we must ask ourselves at this stage is whether the patent office, operating under the aegis of the Ministry of Commerce, should even be adjudicating such disputes which are of a judicial nature. One of the underlying principles of the Constitution of India is that there must be a separation of powers between the three arms of the State i.e. the Executive, the Legislature and the Judiciary must each operate in their own spheres i.e. the Legislature must legislate and lay down the policy in the form of a law, the Executive must execute this policy keeping with the law and the Judiciary must decide the disputes that arise from any violation of the law. While each arm operates independently they are accountable to each other through a system of checks and balances. Such separation of powers is the cornerstone of most democracies and is one of the principle reasons that a democratic form of government is one of the most stable models for governance.
Although the Doctrine of Separation of Powers is not as clearly enunciated in the Indian Constitution as it is in the American Constitution, the Supreme Court of India has held in a series of judgments (the epic case of Keshavnanda Bharti included) that the doctrine of separation of powers forms a part of the basic structure of the Indian Constitution which cannot be amended by the Parliament. The most recent judicial exposition of this doctrine was in the case of Madras Bar Association v. Union of India where the Madras High Court in an excellent judgment concluded that the National Company Law Tribunal as also a National Company Law Appellate Tribunal were unconstitutional because they violated the doctrine of separation of powers. The case was appealed to the Supreme Court and arguments were concluded only recently. Please do read Mihir's excellent post on this case on the India Corporate Law blog. The main objection raised in this case was that the Parliament through the impugned legislation was transferring “intrinsic judicial functions” away from the High Courts and to a tribunal lacking the degree of independence that was required of a body discharging a judicial function. The objection was not that the High Court were being outsed from hearing company law matters but the fact that the new tribunal was virtually an extension of the executive especially since the tribunal was lacking in both institutional independence and individual independence. This lack of independence was attributed to the system of appointments as also the qualifications for the appointments which sometimes bore no rational nexus to the post that was sought to be filled. (For e.g. How does a person armed with science degree useful in deciding a company law dispute?)
The question is whether we can extend this logic to the adjudicatory role of the patent office while deciding opposition proceedings as also compulsory licences for anti-competitive activities. The essential distinction that we must draw here is whether these functions can be characterized as an “administrative function” or as a “judicial function”? In his judgment in the case of Shankarlal Aggarwala v. Shankarlal Poddar AIR 1965 SC 507 Justice Ayyangar (of the Ayyangar Report on Patent Law fame) held that “It is perhaps not possible to formulate a definition which would satisfactorily distinguish, in this context, between an administrative and a judicial order. That the power is entrusted to or wielded by a person who functions as a Court is not decisive of the question whether the act or decision is administrative or judicial. But we conceive that an administrative order would be one which is directed to the regulation or supervision of matters as distinguished from an order which decided the rights of parties or confers or refuses to confer rights to property which are the subject of adjudication before the Court. One of the test would be whether a matter which involves the exercise of discretion is left for the decision of the authority, particularly if that authority were a Court and if the discretion has to be exercised on objective, as distinguished from a purely subjective, consideration, it would be a judicial decision. It has sometimes been said that the essence of a judicial proceeding or of a judicial order is that there should be two parties and a lis between them which is the subject of adjudication, as a result of that order or a decision on an issue between a proposal and an opposition.” (para 9)
Both Opposition proceedings and Compulsory Licensing proceedings are essentially adversarial proceedings where the Patent Office is deciding a lis between two parties. In fact as per Sec. 77 of the Patent Act the Controller is empowered to function as a Civil Court and his powers under this section extends to issuing summons, administering an oath, requiring the discovery and production of any document, issuing commissions for the examination of witnesses or documents, and even awarding costs. In opposition proceedings the Patent Office hears arguments from two opposite parties and decides as to whether or not a patent should be granted or whether a granted patent should be revoked. In a compulsory licensing proceeding the Patent Office decides whether or not the patentee is fulfilling the reasonable requirements of the public. This power extends to deciding whether or not the patentee is selling the product at a 'reasonable price'. Clearly these proceedings are deciding the rights of the citizens. There can be no dispute over the fact that both these proceedings are “intrinsic judicial functions”.
Both of these proceedings are conducted under the direct supervision of the Controller. Under Section 25 the Opposition Board is constituted by the Controller. Under Chapter XVI all CL applications are made to the Controller. And who is the Controller? Usually a patent specialist from within the ranks was appointed as the Controller but for the first time the Government of India has appointed a career IAS officer as the Controller of Patents. In effect we have the Government of India deciding the rights of its citizens. To what level of executive interference are these proceedings open to? Can the Government of India influence an opposition proceeding as also the grant of a Compulsory Licence? Under the present structure, the Executive arm of the Government can definitely influence these proceedings because it is their representative who is heading the patent office. The essential question over here is not whether such interference is taking place but whether there is even the theoretical possibility for such interference to take place.
Coming to the qualifications of the officials of the Patent Office I'm not quite sure where exactly to research this aspect because the Act lays down absolutely no statutory requirements in this regards. This is a matter that I'll deal with in a later post. Please do write in with any information that you may have in this regards.
For now let it suffice to say that the adjudicatory function of the Patent Office is patently unconstitutional because of the lack of insitutional and individual independence of the entire statutory mechanism prescribed under the Patents Act. The question is whether the IP Bar is ready to tackle this problem in the same manner that the Madras Bar Association dealt with the National Company Law Tribunal?