Patent Misuse : The Doctrine and its Relevance

(By Dr. Raju Narayana Swamy, IAS)

Introduction

Patents protect technical embodiments of an invention. They bestow exclusive rights upon their owners. This means that the patent holder has the right to prevent others from using his or her invention and thus control the manufacture and distribution of such products including their prices. Patent misuse serves as an insurance policy against unanticipated roguish behaviour from patentees. The ingenuity of patentees to devise ways of abusing their patent rights is matched only by the potential malleability of patent misuse. It appeals to our sense of right and wrong and exists to arrest misconduct not made illegal under existing laws even at the cost of vagueness.

Patent misuse is a court-made doctrine. It is an affirmative defence. In fact, judges tailor the penalty for misuse according to the justice required by the individual case.
It refers to a loose collection of activities by which the patent owner is said to have taken unfair advantage of the patent right in the marketplace. Patent misuse  is a tool that courts use to maximize net social welfare by invalidating inefficient restrictions through which patent holders earn rewards that are incommensurate with the patent grant and suppress technological progress. It acts as a public injunction against abuses of the privilege granted under patent law and balances public and private interests. It creates a scheme of royalty free compulsory licensing when a patentee is guilty of misuse. Patent misuse is designed to have a deterrent effect and it is less concerned with reversing an improperly accrued market benefit. It is a special form of punishment devised for over-reaching patentees who are using their patents to monopolize something other than the invention. Examples of patent misuse include the following under the guise of sham patent licenses

(a)        Tying: - It occurs when a seller conditions its sale of a patented product on the
            purchase of a second product.

(b)        Package Licensing:- A package license covers more than one patent.

(c)        Horizontal Price Fixing: - It involves an agreement among competitors at the
            same level of the market structure (eg:- producers, wholesalers or retailers) to set
            a price for a particular commodity – directly or indirectly.

(d)        Territorial Allocations:- These are arrangements to divide up territories so that
            customers have no choice but to purchase from the seller who has the rights to the
            designated territory.

Patent misuse first appeared in the 1917 US Supreme Court decision called the Motion Picture Patents Case.¹In the said case, the plaintiff owned a patent on a mechanism for threading film into a movie projector. The patent was licensed on condition that all movie projectors contain a notice precluding the use of any film not manufactured by the patentee. The Court held that the restriction violated patent policy as it imposed a license restriction falling outside the scope of the patent. However it was not until 1942 that the Supreme Court formally articulated the doctrine in Morton Salt v. G.S.Suppiger Co. Morton Salt’s patented machine deposited salt tablet in canned goods. It leased its machines to customers if they purchased their salt tablets from Morton Salt. Morton Salt discovered the defendant making infringing machines and sued it for patent infringement. Chief Justice Harlon Fiske Stone framed the question as “ whether a court of equity will lend its aid to protect the patent monopoly when respondent is using it as the effective means of restraining competition with its sale of an unpatented article.” But things came to a head in Mercoid Corporation v. Mid -- Continent Inv. Co.(320 US 661 (1944)) when the Court
extended misuse to render tying arrangements unenforceable even though the tied components had no substantial non-infringing uses. Throughout the 1940s, Courts made abundant use of the patent misuse doctrine and struck down a variety of restrictive license agreements particularly those that involved tying.2The expansion of the patent misuse doctrine occurred mostly before the 1970s. This has led some scholars to contend that the doctrine is an anachronism that can only be explained by the jurisprudential setting in which it arose -- at a time when antitrust was in its formative years. The main reason why patent misuse is difficult to define and operationalize is its “identity crisis” which stems from a lack of a coherent basis in IP policy because misuse lacks unifying principles for determining which practices should be condemned and why.

A chequered history of the doctrine

Patent misuse as a doctrine has waxed and waned through the years. Early on in 1968, the Tenth Circuit recognised that the success or failure of patent misuse lay with the courts. It is often analogized to the fair use defence in copyright law. Like fair use, patent misuse is an open ended and context-sensitive inquiry. It is viewed favourably by some and reviled by others. Those who object to it point out its vagueness, lax standing requirements and punitive effect on patentees. Criticisms of patent misuse in fact centre on three areas.

First, vagueness of misuse detracts from commercial certainty. The lack of sharply defined boundaries may deter those with a penchant for rationality from buying into reinvigorating patent misuse as a robust defence. Put it a bit differently, misuse should not become an open ended pitfall for patent supported commerce. There are arguments that patentees face a challenge staying on the right side of the law and that operationalizing policy through patent misuse creates an undesirable in terrorem effect. Critics point out the judgement in Control Components Inc. v. Lexmark International Inc where a District Court was faced with the novel question of whether patentees whose patents cover single-use toner cartridges could restrict the use of any given cartridge after the exhaustion of its patent rights in that cartridge even without licensing agreements containing post-sale reuse restrictions. The Court could not find misuse as a matter of law even though it agreed that Lexmark was doing something wrong in a vague sense. However, the counter argument is that uncertainty is the price of ensuring appropriate incentives for innovation and that it is the flexibility to mould each decree to the necessities of the particular case that allows equity which provides the fine-tuning to the broad brush of legislation and governmental policy.

Second, critics of misuse oppose lax standing requirements that allow those unharmed by the patentee’s misconduct to invoke the aid of courts to render the patent unenforceable. Misuse pays the sanction as a windfall to an unrelated third party thereby encouraging infringement while failing to compensate those actually injured. Third, they believe that unenforceability of an entire patent due to an offending claim is too harsh. Denying the  successful patentee its remedies is a species of forfeiture. In fact, studies point out that judges are often unwilling to find misuse in marginal cases because of the perceived harshness of the doctrine. Courts have often exercised their discretion -- even upon finding misuse – not to impose the remedy of unenforceability where the impact would be too drastic. For instance, in Ethyl Corp.v. Hercules Powder Co³it was held that although Zeigler attempted to do that which he was incapable of legitimately doing, application of the doctrine of misuse is too drastic. Legal circles often propose that cases should distinguish between transaction and litigational misuse with the patent being rendered unenforceable only in the latter case. The former case results only in unenforceability of the offending contractual provision.

It is worth mentioning here that the early twentieth century is often described as an era of IP expansion and antitrust accommodation. Then antitrust aggressiveness was ushered in beginning with the New Deal and extending through the Warren era. During this period, the Supreme Court was more inclined to view patents as inherently anticompetitive and to interpret the antitrust laws expansively. In the 1960s and 1970s antitrust was scaled back to focus on identifying serious threats to competition that were not justified by explicit provisions of the IP laws. Thereafter came the present epoch when we once again live in an era of IP expansionism. In fact, the heyday of patent misuse began to wane in the 1980s and the doctrine was almost terminated in 1988 by legislation which prohibited a finding of patent misuse unless the patentee’s practices violated the antitrust laws. The ultimate version of this legislation produced an amendment to the patent law. With this amendment – which was drafted in response to persistent criticism of this judge-made equitable defence to patent infringement – the very existence of the doctrine of  patent misuse independent of antitrust law was viewed as being of questionable validity.

Even before the aforesaid amendment, the creation of the CAFC in 1982 diminished the importance of the patent misuse doctrine. In a series of cases, the CAFC cut back on the scope of patent misuse. Whittled away by the CAFC and directly modified by the amendment, the patent misuse doctrine seemed of dubious validity by the end of the 1980s. Still the doctrine has been affirmed more than twelve times by the Supreme Court. Although there has been a drift away from the doctrine in the decades thereafter, the Supreme Court never addressed the Federal Court’s hostile pronouncements on the doctrine. And even the Federal Court has progressively backed away from its initial negative attitude. In fact, Federal Circuit cases identified three categories of patent misuse. The first are forms of per se misuse (which include tying, post-expiration royalties and price–fixing arrangements). The second category includes forms of conduct specifically immunized from a finding of misuse (which includes refusal to licence as well as tying arrangements in which the patent owner had no proven market power). The third category is where the conduct is neither expressly exempted nor condemned.  Since “Windsurfing” , the CAFC has also backed off its draconian statement. 

Patent Misuse and Courts of Equity

The origin of patent misuse lies in the equitable doctrine of unclean hands. This doctrine -- colourfully named, equitable in origin and reflecting in its name at least the moralistic background of equity in the decrees of the clerics who filled the office of Lord Chancellor of England during the middle ages - now a days just means that equitable relief will be refused if it would give the plaintiff a wrongful gain. It is guided by more than sterile economic analysis. In framing its approach to patent misuse, the Supreme Court has categorically stated that the necessities or convenience of the patentee do not justify any use of the monopoly of the patent to create another monopoly.⁴The fundamental inquiry is whether by imposing a challenged condition the patent owner has improperly expanded the physical or temporal scope of the patent grant with anticompetitive effect.⁵Where the restriction is reasonably within the patent grant, the misuse defence can never succeed⁶
 If the patent owner can be proved to be engaged in prohibited conduct, the patent is rendered unenforceable despite its validity.

Courts will not aid a patent owner who has misused his patents to recover any of their emoluments accruing during the period of misuse or thereafter until the effects of such misuse have been “purged”.⁷Critics argue that as the bar on infringement suits continues until the wrongful consequences have been dissipated fully, a finding of misuse essentially gives a green light to infringers for the foreseeable future. In fact, the burden of purging misuse may well be greater than the benefits of pursuing the infringement and it will deter patentees from enforcing legitimate rights. Thus misuse unnecessarily undermines the value of patents and the innovation policies pursued by the regime. Purging requires patentees to show that they have completely abandoned the misconduct and that their “baleful effects” have dissipated. There is no set time period for purging. In fact, the time will vary with the facts of each case. Whether a purge has been accomplished is a factual matter and is largely discretionary with the trial court.⁸However, a defendant claiming patent misuse is not required to show that he/she was personally harmed by the misuse.9Evidence of direct harm to the complainants is a secondary factor in determining the issue of standing. They serve a more important role- a bugler alerting the Court to wrongdoing so that public interest may be protected.10

In contrast with contract-based defences such as equitable estoppels and implied license, the patent misuse defence is not restricted to those who had negotiated with the patentee.  As the District Court observed in Petersen v. Fee International Ltd., “ It is not material that plaintiffs were not a party to any of the various agreements and assignments.... In their ‘ball of wax’ is patent misuse with an adverse effect upon the public which disqualifies defendants from claiming infringement of the patent.” In Multimedia Patent Trust v. Apple Inc,
a case involving standard setting organizations, although the defendants were neither licensees nor competitors, the District Court implicitly accepted that misconduct warranted further scrutiny, pointing to the use of misuse as a type of system integrity check to ensure that the mechanism Congress had put in place to promote innovation and competition is not compromised. Similarly in Compton v. Metal Products Inc, the Fourth Circuit concluded that the agreement amounted to misuse and that it did not matter that Metal Products was not a party to the agreement. In Procter & Gamble Co.v. CAO Grp Inc, the District Court recognised that defendant represents not only itself but in a sense also the public which is likewise excluded from the field of monopoly that an in-force patent grants to the holder. Needless to say, the doctrine offsets other pro-patentee doctrines that effectively extend patents such as the doctrine of equivalents.

Patent Misuse v. Antitrust Law

The patent misuse doctrine overlaps antitrust law in many ways. It quintessentially represents the patent-antitrust interface. Though its past is rooted in patent law, its present is intertwined with antitrust laws. Both seek to restrain the myriad ways that a patentee’s exclusive right can be abused. At a sufficiently high level of abstraction, the goals of promoting innovation and competition pursued by both the antitrust and patent laws are similar. In fact, misuse contains a blend of competition and innovation policies.  The discussion of the history of misuse reveals two different premises for invoking the defence -- the Morton Salt standard which focuses on abuses of the patent system and the Windsurfing standard which focuses on anticompetitive effects measured through the rubric of the antitrust laws. 

Opinions are galore that the misuse doctrine arose at a time when antitrust was in its infancy and that today when our understanding of competition is much more elaborated, there is no continuing need for the doctrine which must simply be folded into antitrust law. In fact, antitrust law is a larger and more fully developed body of law than patent misuse.
A source of confusion at the junction of patent and antitrust law could be eliminated by applying antitrust rules in such a manner as to provide greater clarity to the misuse doctrine.  The thinking is that antitrust has evolved a  precise methodology as opposed to the equitable doctrine of misuse which is relatively imprecise.  This sentiment was expressed by Judge Posner who stated that “ if misuse claims are not tested by conventional antitrust principles, by what principles shall they be tested?”¹¹Some are also of the opinion that the misuse doctrine reduces the incentive to innovate while discouraging pro-competitive licensing practices that disseminate patented technology. The opposite side on the other hand argues that the doctrine despite the overlap serves policy goals that differ from antitrust. Michael Carrier for instance conceptualizes the tension between patents and antitrust as the patent antitrust paradox. According to him, patent and antitrust systems promote welfare in different often conflicting ways: the patent system is based on exclusion while antitrust law focuses on competition. Since exclusion -- based acts often restrict competition, Courts are left to reconcile the two systems for promoting welfare without any compass to guide them.

To enumerate the differences between the two, first of all an antitrust plaintiff must prove injury to sustain a course of action. In fact, the plaintiff’s injury must have been proximately caused by the defendant’s antitrust violation. By contrast, a defendant asserting patent misuse has a less strict standing requirement.  Secondly, only injunctive and not monetary relief is available  for patent misuse the remedy of which is essentially equitable in nature. This is in striking contrast to antitrust laws which grant damages and lawyer’s fees in addition to injunctive relief.  To put it a bit differently, whereas misuse results in unenforceability of the patent, antitrust provides a host of remedies including a devastating nondiscretionary trebling of damages by a Court. A word of caution is needed here : Allowing misuse defence to exist separately from antitrust laws affords the infringer a dual recovery. Thirdly, antitrust law is designed to address only particular types of harm and cannot reach everything that patent policy addresses. For instance, patents do not necessarily result in market power and hence patent policy concerns itself with broader considerations than with firms that enjoy market power. On the contrary, applying antitrust standards will only prevent extensions by firms that have market power.  Antitrust is not sensitive to situations where a patent holder has leveraged its power into neighbouring markets and where those acts would not constitute an antitrust violation such as attempted monopolisation. The basic problem is that antitrust focuses on competition in defined markets and may even be blind to activities that undermine the overall effectiveness of the patent system.  On the other hand, patent misuse is not only about ‘monopolistic abuse’ but also serves as an internal constraint on efforts to expand the patent system beyond its bounds.

The infusion of patent misuse with antitrust law became even more apparent in the Federal Circuit’s 1992 decision in Mallinckrodt Inc v. Mediapart Inc where “as with an affirmative antitrust claim, the issue of misuse was held to require further legal analysis under relevant antitrust principles before it could be determined whether invalidating misuse had occurred.”

The Actavis Decision

No discussion on the patent-antitrust interface will be complete without a reference to the recent caseFTC v. Actavis Inc ¹²wherein the US Supreme Court revitalized the debate on how the law should operationalize policy dichotomies underlying the same. It however needs to be underlined that Actavis did not mention -- much less explain-misuse. Actavis has made it clear that both patent and antitrust policies are relevant in determining patent misuse. For patent misuse, this means the rule of reason-type analysis will continue to feature in its jurisprudence and so should patent policy.The Court held that pay-for-delay settlements between patent-owning drug companies and their generic competitors could be anti-competitive even if these settlements were within the scope of the owner’s patent rights. The Actavis decision has been hailed as potentially one of the most important
patent/ antitrust rulings of all times and as the latest in a string of cases signalling a concerted effort by the Supreme Court to narrow the reach and scope of patent rights. In fact, the shift in Actavis stems from more than a changing view of patent rights. It also signals a shift in the Court’s view of antitrust law itself. The Court held that “ patent and antitrust policies are both relevant in determining the ‘scope of the patent monopoly’ ”. Whether a particular restraint lies beyond the limits of the patent monopoly is a conclusion that flows from that analysis and not its starting point. The Court also found it important that the public interest in granting patent monopolies exists only to the extent that the public is given a novel and useful invention in consideration for its grant.  Where this interest is violated, the Court has struck down overly restrictive patent licensing agreements -- irrespective of whether those agreements produced supra- patent-permitted revenues.

The Actavis case pertained to a situation wherein a dominant drug company paid potential rivals millions of dollars not to compete at the cost of public access to cheaper medicine. To be specific to facts, Solvay agreed to pay millions of dollars to each generic- $ 12 million in total to Paddock, $ 60 million in total to Par and an estimated $ 19- $ 30 million annually for nine years to Actavis. The interests of these rivals- once aligned with the public – had been twisted to align with its former rival and current paymaster. These settlements cost consumers $ 3.5 billion a year. The Court pointed accusingly to the Hatch- -Waxman Act as a significant reason for these settlements.

Actavis ushered in an age of more vigorous antitrust scrutiny of patent rights. Its true  legacy lies in the promise of catalyzing those from patent and antitrust spheres into moving towards a realistic compromise on how the rules that affect them both should look like and function. Even a valid and infringed patent did not give the patentee carte blanche to do as it pleased. Antitrust law could limit the exercise of patent rights if it harmed market competition and consumer welfare.  To support its conclusion, the Court dusted off its older decisions from the 1940s to the 1970s. However, a word of caution is needed here as regards the two risks involved in increased antitrust scrutiny -- first, patentees may be less willing to invest in new drugs and second, generics may be less willing to mount patent challenges because the likelihood of obtaining a settlement needs to be further documented post Actavis.  Described by Robin Feldman as “ground zero” for pharmaceutical development and sales, the impact of Actavis on drug prices and innovation -- for better or worse- will be felt in US and far beyond.

Kimble v. Marvel Enterprises Inc.

Another case that could affect both the defence of patent misuse and the patent-antitrust interface more generally is Kimble v. Marvel Enterprises Inc.¹³ An enterprising attorney named Stephen Kimble invented a toy that allowed its user to shoot foam-string and subsequently obtained patent for it (US Patent No 5,072,856 (filed May 25,1990) (Issued December 17, 1991).¹⁴When Marvel began making “Web Blaster” Spider- Man toys, Kimble sued Marvel for patent infringement. It is to be mentioned here that the Web Blaster allowed that toy’s user to shoot foam-string from a can mounted on the user’s wrist by activating a trigger in the user’s hand. Like Kimble’s toy, the Web Blaster was packaged with a glove, but unlike Kimble’s toy, the Web Blaster grove was purely cosmetic- a Web Blaster user did not need the glove in order to shoot foam-string. The District Court awarded Kimble 3.5 % of net product sales on the Web Blaster. The parties eventually settled the case, but the settlement provided no end dates for royalty payments. Over the years, Kimble earned more than six million dollars in royalties. Cordial relations broke down when Kimble sought royalties over the purchase price of newer toys when the invention was only one fifth of the functionality of the toy. In response, Marvel sought a declaration that it was not obligated to pay Kimble following the patent’s expiration.

Judge Callahan held that the hybrid licensing agreement encompassing inseparable patent and non-patent rights was unenforceable beyond the expiration date of the underlying patent unless the agreement provides a discounted rate for the non-patent rights or some other clear indication that the royalty at issue was in no way subject to patent leverage. It deserves to be mentioned here that the Kimble Court invoked the dictum laid down in Brulotte v. Thys Co¹⁵ (which concerned hop-picking machines that were sold for  flat fee along with licences requiring seasonal royalty payments for their use to be paid indefinitely). The Supreme Court found that a patentee’s use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se. The Court drew on the fact that the Constitution prescribed exclusive rights to inventors for limited times. Once the patent expired those once exclusive rights became public property and extending the patent monopoly post-expiration runs counter to the policy and purpose of the patent
laws regardless of the legal device employed. Mention also needs to be made here of Smithkline Beecham Corporation v. Apotex Corp.wherein the Court concluded that it would be a ‘ travesty of equity’ to permit the plaintiff an extension of its patent beyond the patent term.

Is patent misuse the only patent doctrine concerned with competition?

The answer is in the negative. For instance, Courts use patent exhaustion to prevent patentees from leveraging their patents to control downstream commerce. Similarly, judge-made doctrines such as experimental use and inequitable conduct circumscribe the extent to which patentees can interfere with third party activities and extinguish conferred rights. More broadly, doctrines such as functionality in trademark law illustrate how IP policy endogenously incorporates competition concerns.

Can patent misuse be misused?

Like every tool, patent misuse may itself be misused. Its flexibility can devolve into debilitating uncertainty. Its overlap with antitrust law can become a flimsy cantilever and as its distinct mission to safeguard patent policy vanishes, so will it. Punitively applied, it will realize its detractors’ worst fears. Prudently applied, it may yet prove itself to be a keen and incisive scalpel capable of complementing the rougher cuts of the antitrust laws. In fact, the validity of patent misuse ultimately depends on those it was created by and for -- the judges themselves.16Patent misuse should not degenerate into a free-floating ‘get out of jail frr’ card. The discretionary nature of misuse often results in a jumbled mix of platitudes and reprimands and results in lack of coherence and predictability.

A few situations where application of patent misuse doctrine is appropriate

Grant-back licenses often call for scrutiny under the doctrine of misuse. These refer to imposition of a licensing restriction wherein the patentee requires the licensee to grant its rights to any improvement patents or other new technology that the licensee develops while using the patented technology. Needless to say, grant backs may have both
pro-competitive and anticompetitive consequences depending on the circumstances. However grant backs in a patent pool context create disincentives to innovate by licensees and hence bear directly on patent policy making it an appropriate arena for scrutiny under misuse doctrine.

Another area worth mentioning here is coercive package licensing wherein a firm with a large patent portfolio offers to license patents in a single package. The US Supreme Court has held in Zenith Radio Corp.v. Haseltine Research Inc 17that mandatory package licensing may contract patent misuse.

A third scenario where the doctrine of patent misuse is pertinent is the realm of standard setting arrangements. Technical standards (such as file formats or interface protocols), it must be mentioned here, are extremely important in software and other “network industries”18
Consumer market standards that ensure interoperability of products enhances their utility and hence the need of the hour is that patent law policy should encourage development of reliable open standards while retaining incentives for innovation. Robert Merges and Jeffrey Khun have argued that ¹⁹patent misuse is not entirely suitable to remedy abusive practices in standard-setting context – it having been traditionally applied in cases of antitrust-like abuses – and proposes the use of a standards estoppels doctrine to fill the gap. But the reality is that what they propose is only a subset of patent misuse.

Relevance of the doctrine in the years to come

The general view today is that courts should retain at least some form of the doctrine, given the fact that a patent is a privilege that is conditioned by the public purpose of promoting innovation. It is very much needed to provide a modest means to level the litigation playing field currently skewed in favour of the patentee. In 1957, the Ninth Circuit observed that patent misuse was one of the most important and unsettled aspects of patent law. And that sentiment continues to echo even today. Judges could leverage a colourable misuse case to push parties towards settlement by making risk adverse patentees choose to settle on terms it has more control over and the risk of losing on appeal. At the same time, finding misuse expansively will diminish the value of patent rights and discourage investment in innovation.  Misuse defence is not to be taken as dogmatic and its application automatic.²⁰

As novel techniques emerge in the areas of patent accumulation and licensing, there is a need for a broad equitable doctrine -- one that can evolve with the times- to curtail forms of patentee behaviour that abuse the patent system. As the number of issued patents increase, companies anxious to avoid these patent thickets²¹will contribute to a higher frequency of licensing agreements and therefore increase the likelihood that misuse might result. Patent misuse may find its second wind in the wake of controversial practices by PAEs (Patent Assertion Entities) such as Innovatio IP Ventures who sued customers to “hold-up”  manufacturers providing devices complying with the Wi- Fi Standard.  Another prominent PAE is Intellectual Ventures which was accused of targeting the market for technology enabling business processes common throughout the commercial banking industry in the US. Owners of standard essential patents who transfer their portfolios to PAEs to avoid licensing commitments should also expect to face sanctions under patent misuse.

The doctrine can never be without use because at the very least it would be a way of punishing patentees who engage in egregiously bad behaviour that might not be covered by all the other defences like invalidity or inequitable conduct. In fact, it gives the Court one more instrument for preventing serious injustice or abuse. There is no way that rules- whether derived from case law or statute -- can cover every factual situation. And that is the value of equity-based doctrines like patent misuse. For, the role of equity was noted long ago that “ a country can put up with laws that are harsh or unjust so long as they are administered by just judges who can mitigate their harshness or alleviate their unfairness.²²
In fact, equity acts as a fair arbiter.

Conclusion

The need of the hour is a more thoughtful framework for patent misuse that draws upon the strengths of  its roots in patent policy and its interface with antitrust policy. To put it a bit differently, the doctrine is not dead or totally redundant of antitrust case law , but it is hard to have any sense of how much vigor it might have beyond antitrust case law. This should be coupled with the observation that patent policy remains a rich untapped vein in patent misuse despite its Supreme Court pedigree in Morton Salt. If reinvigoration of patent misuse takes place, it will in all likelihood be a compromise balancing innovation and fairness in dealing with competitors and consumers with commercial certainty and robust exclusionary rights and thus encourage the continued production and exploitation of inventions that enrich our daily lives. If it is well tried with evidentiary support, it will be taken seriously. It is entirely the choice and ability of the litigators. But unfortunately misuse is routinely and carelessly alleged and then not seriously pursued. This situation needs to change. Litigators should also be mindful of forum selection. A forum which recognizes that patentees are self-interested individuals and that acknowledges the limited capabilities of the Patent Office will be more receptive to expanding patent misuse. Through debate, experimentation and refinement innate in the common law, future cases can craft pieces that will form a coherent analytical framework for the interface between patent and antitrust laws. These efforts must be supported by clear-headed constituents who look beyond the rhetoric and translate economic insights into workable legal rules.

YEH DIL MAANGE MORE

A Senior Bank Manager wanted more despite receiving Rs.1,07,73,736

By Advocate H.L. Kumar

The desire is unending. The more one gets, the more one desires. This is a human weakness. It is very aptly said that ‘Yeh Dil Maange More’ (This heart desires more). It does not mean that any curb should be imposed on the wings of the human ambitions to soar high. In fact, it is the vision grounded on the reality that has been mainly responsible for achieving the lofty goals. Our Industrial jurisprudence may really sound strange to most of the people, wherein a senior manager of a bank getting salary of Rs.58,339 per month has been held to be a ‘workman’ under section 2(s) of the Industrial Disputes Act, 1947, and the management had to even pay Rs. 1,07,73,736/- by way of the compensation. Thus, it becomes clear that any procedural lapse on the part of the Human Resource Managers results in heavy costs to the organisation. Such lapses generally occur mainly due to wrong legal advice. Therefore, it is imperative on the part of the Managements that they follow the expert legal procedures.

The concept of ‘workman is central to the concept of an industrial dispute as an industrial dispute can be raised either by a ‘workman’ or an ‘employer.’ Since the Industrial Disputes Act, 1947 is a piece of beneficial legislation, the courts have enlarged the scope and applicability of this Act by giving a wide interpretation to the term ‘workman’.  Section 2(s) defines workman as any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, terms of employment are express or implied and include any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of the dispute. The amounts of money to be paid as wages have now become almost irrelevant.

The Courts have interpreted this definition and have identified various determining factors to know whether a person is a ‘workman’ or not. The factors which should be considered are - (a) whether there is a Master-Servant relationship’, (b) when a person is performing various functions which overlap in their characteristics, the nature of the main function for which the claimant is employed should be considered. (c) work is either manual, skilled, unskilled, technical operational, clerical or supervisory in nature, the mere fact that it does not fall within the exception would not render a person to be workman, and hence the following factors must be taken into consideration.

The Delhi High Court by an order dated 12.10.2021 has directed the All-India Institute of Medical Sciences to pay a driver Rs.50 lac as salary in addition to Rs.19,900 per month toward monthly pension besides directing the AIIMS to deposit Rs.30,000 as a lifetime validation amount for being enrolled under the Employees and Health Scheme to a driver whose services were terminated in Dec. 1998.  It is unbelievable an able-bodied person, that too, an experienced driver can remain unemployed for such a long period provided he was willing to work.  A driver can easily find a job or ply a bus, truck, taxi, three-wheeler auto, e-rickshaw etc. etc.  

In this context it is pertinent to refer to a judgment Delhi High Court¹ wherein it has been held as under :

“The fact that the respondent/workman was working as a Driver with the petitioner/management and therefore was a skilled person, it is hard to believe that even this long period from 14th September, 1990 till the award having been passed on 2nd December, 2003, he would have remained idle, especially when there is great demand of the drivers to drive the vehicle especially in big cities.  Therefore, it is safe and reasonable to presume that the respondent/workman must have been gainfully employed as a Driver even during this period and he cannot be permitted to take advantage of the pendency of the proceedings before the Court and get a substantial amount of public money without having worked.  No work no pay should be the rule”.

Offenders Usually Bend or Break Laws

There are a large number of cases where the workers are absent or keep away from work and do not report for work despite offers made by the employers. On the contrary, they approach the Labour authorities and allege that their services have been dispensed with and seek reinstatement with back wages by abusing the process of law. Now in successive judgments, the Courts have held that such a workman cannot reap the benefits of his own fault.

The Industrial Disputes Act is the pivot of the labour laws. It has undergone comprehensive changes from time to time. It mainly stands on to fulcrums of dispute resolution and adjudication. However, the undercurrent is to dispense justice and prevent misuse of its benign provisions. Hence the Industrial Disputes Act provides the mechanism of the dispute resolutions supported with necessary infrastructure so that the energies of partners in production may not be dissipated in counterproductive battles and assurance of industrial justice may create a climate of goodwill. The emergence of the concept of welfare state implies an end to the exploitation of workmen and as a corollary to that collective bargaining came into its own and lest the conflicting interests of workmen and employer disturb the industrial peace and harmony, machinery for adjustment of such conflicting interests became the felt need of time. Because if the disputes are not settled, they would result in a strike or lockout, and dislocation of business essential to the life of the community. At the same time, the provisions of the Act are meant to help the needy, and as such these provisions are not to be invoked by a person who is greedy.² The Bombay High Court has also observed that labour laws are not meant to harass the employer but to get the injustice undone. The machinery of the Act cannot be exploited to extract money from the employers in an unjust way.³

There is a catena of cases where the courts have ruled that the protective umbrella of the labour laws should not be used as a weapon against the management for subserving their vested interests. In one case, as decided by the Madras High Court, it has been made clear that the termination of a workman for his habitual absence and not joining his duties despite letters and reminders to this effect will be legal and justified and when no enquiry has been held by the management.⁴ The conspectus of the case was that the petitioner was working as the ‘office boy’ in the Corporate Office of the respondent Company. The petitioner applied for leave on the ground of sickness from 22nd April 1991 to 23rd May 1991. On 27th May 1991, he applied for leave for one day on 28th May 1991. His leave application was submitted in the corporate office and the same was approved. Thereafter, the petitioner remained absent. On 27th August 1991, a final reminder was sent stating that if the petitioner did not report for duty within 48 hours, he would be deemed to have left the service. Finally, on 13th September 1991, the petitioner was informed that in view of his continuous absence without leave application and without any information, he was treated as having left the service of the company with effect from 28th May 1991. The letter sent by registered post with acknowledgement due was returned with an endorsement ‘refused by the petitioner’. The publication was made in “Daily Thanthi”, dated 22nd September 1991.

On 22nd February 1993, the petitioner raised an industrial dispute challenging the order of termination of employment. The Labour Court did not give any relief to the workman and hence the validity of the order was challenged in the writ petition.

The petitioner contended that there has been a total violation of the principles of natural justice in passing an order of termination. The High Court said that even with regard to the contention that non-conduction of the enquiry would vitiate the whole proceedings, the petitioner’s contention has also been correctly rejected by the Labour Court because the letters sent by the management, which have been marked as documents, would make it clear that the workman was required to join duty, failing which he would be deemed to have been terminated from service. For those letters, there was no response from the workman and the letters were returned with the endorsement “refused”.

Reference is also made to a case by Delhi High Court holding that the Industrial Tribunal erred in granting reinstatement with full back-wages to the bank employee since he was not interested to be posted at a branch of the bank when he specifically wrote that he will not work unless he is posted at the place of his choice.⁵

In yet another case, the Bombay High Court has said that a workman cannot reap the benefit of his own fault when he fails to respond to the offer of the employer to join duties more particularly when such offer was reiterated before the conciliation officer.⁶ The High Court further said that it will not set aside the award of the Labour Court in holding that the workman, who failed to comply with the repeated offers to resume his duties after alleged termination, has abandoned the job of his own accord and as such he will not be entitled to reinstatement with back wages.

In this case, the workman joined the company as a clerk sometime in the year 1985 and filed a complaint that his services were illegally terminated orally from November 16, 1995, without any justifiable reason.  Quoting from Sonale Garments vs. Trimbak Shankar Karve,⁷ the Bombay High Court has stated that “Whenever the employer offers to reinstate the workman at any stage of the dispute or proceedings and if the workman does not accept the offer even without prejudice to his rights and contentions, he will not be entitled to continue his claim for reinstatement in the proceedings and he will also be not entitled to claim any back wages from the date of such offer, conditional or unconditional”.

The Bombay High Court while denying the back wages as claimed by a workman had observed that the materials on record apparently disclose that “the petitioners in their written statement had clearly stated that the workman was at liberty to report to duty without prejudice to the company’s right to take disciplinary action against him and the said statement was made as long back as on 23.3.1992 and yet the workman had not reported to duty nor any explanation in that regard was placed on record by the respondent. In the circumstances considering the fact that the workman failed to avail the opportunity offered by the petitioners the workman would not be entitled to saddle the employer with back wages for his own fault and own failure to report to the duties in spite of the unconditional offer being made by the employer”.⁸

No back-wages are to be granted when the workman has neither pleaded nor stated in evidence hence mere answer to a question in cross-examination about unemployment will not be justified for back-wages to workman as held by the Delhi High Court.⁹  Also back-wages are rightly denied if workman made no efforts to secure employment during interregnum.¹⁰

In another case, when the workman failed to make compliance to the offer made by the management before the Conciliation Officer to resume his duties but he failed to report for duty, the Labour Court held in granting reinstatement with 75% back-wages., the High Court set aside the Award.¹¹

It is also pertinent to note that when the workman not join duty despite repeated call letters sent or opportunity given, by the management, it will be appropriate to consider that he has abandoned the job himself. When the Award is neither perverse nor improper or based on evidence, the writ Court has no jurisdiction to entertain the same.¹²

Also, the Karnataka High Court has held that back-wages on reinstatement as awarded by the Labour Court could not be awarded by the High Court in a writ petition filed by the petitioner when on the date of hearing the respondent was absent and the High Court has affirmed the order dated 22.3.2014 that he will be entitled to wages only from the date he reports for duty and, as such, the order passed by the Labour Court under section 33C(2) of the Industrial Disputes Act has been set aside.¹³

In the absence of documentary evidence, merely filing affidavit or self-serving statements would not suffice.¹⁴

An employee, who has been repeatedly offered the opportunity to join the services by the employer, when fails to take benefit of such an offer, cannot thereafter insist for the relief of reinstatement or for back wages. It would amount to ordering a grant of premium for the mischief played by the workman himself. Being so, once the materials on record clearly disclose that in spite of repeated offers by the respondent company, the workman had failed to report to his duty, there was no fault on the part of the Labour Court in refusing the relief of back wages. Once it had been the consistent case of the company and having been established with the materials on record that there was no termination of services, but it was a case of abandonment of services by the employee without any justifiable reason, the question of ordering reinstatement also cannot arise viewed from this angle, therefore, there was no case for interference in the impugned order by this Court in its writ jurisdiction.

1.   Delhi Transport Corporation vs. Sh. Ram Kishan (Ex-Driver), 2010 LLR 394 (Del. HC).

2.   MukeshKhanna vs. Chandigarh Administration, Chandigarh, 2000 LLR 168 (P&H HC).

3.   M/s. Purofil Engineers Pune vs. Shaikh Anwar Abdul Raman, 2000 LLR 268 (Bom. HC).

4.   P. Krishnan vs. Management, Jonas Woodhead& Sons (India) Ltd. Madras and Presiding Officer, Second Addl. Labour Court, Madras, 2003 LLR 852 (Mad. HC).

5.   Syndicate Bank vs. Sh. B.N. Pandey & Anr., 2010 LLR 903 (Del. HC).

6.   Raju Shankar Poojary vs. Chambur Warehouse Company and Another, 2003 LLR 1150 (Bom.HC).

7.   Writ Petition No.836 of 1996 decided on 29th August 2002.

8.   Suja Agencies vs. Uday Singh B. Rawat and Another, 2004 LLR 20 (Bom. HC)

9.   All India Institute of Medical Sciences vs. Raj Singh, 2007 LLR 852 (Del. HC).

10.  GopalNandkishor Sharma vs. Manager, Nanavati Associates, 2007 LLR 1164 (Guj. HC).

11.  Management of M/s. Amazone Exports Pvt. Ltd. vs. Secretary Labour & Anr., 2013 LLR 312 (Del. HC).

12.  Jamil A. Adhikari, Mumbai vs. Oberoi Towers, Mumbai, 2016 LLR 901 (Bom.HC).

13.  Bangalore Metropolitan Transport Corporation vs. B. Ningappa, 2016 LLR 384 (Karn. HC).

14.  Badal Prasad vs. The State (NCT of Delhi) & Anr., 2012 LLR 1125 (Del. HC).

Law and Morality

(By Ananthika Basant, Vth Semester, B.A. LL.B., Bharata Mata School of Legal Studies)

Law and Morality has their own perceptions of what is right and wrong. In some cases they agree with one another whereas in other cases they don’t. Before when law was codified and introduced to the world, morality was considered as the rule of the country. Morality differs from one place to another on the basis of custom, culture etc. These morals were converted into law, which became codified. There is a huge discussion whether to incorporate morality into law. Law as we know are legal rights and duties that are protected and enforced by the state. If one disobeys the law of the state, he is punished. Whereas morality identifies human behaviour as right or wrong. One does not conform to moral standards of society, cannot be penalised by law. He will only be looked down upon by society. Morality is a very subjective concept, as mentioned before it varies from place to place and from person to person. Morality controls both internal and external behaviours and law only interferes with external.

In my opinion, law must not take morality as a whole into consideration. But morality should have an influence in law. What is right for one group need not be right for another group. An example to explain this can be the LGBTQ+ community, there is still a huge group of people who are against this community. With their moral codes held close to their heart, it is a wrong for them. Whereas the other group who has a more open minded moral ideas, accept this community and treat them like any other normal human being. The point I would like to specify is that, morality shouldnt be incorporated into law instead it should have an influence over law. Marital rape is something that is still not considered as an offence. But our morality opens our eyes and shows us that it is something wrong and should be penalised under law. In this we can see how morality can be helpful in influencing law. Not all moral values should be considered for this. There might be the ones which are more generally accepted among the different communities and people, those values should be the ones that have to be taken into account to influence the law. Also as we move from one generation to the other, moral values changes and becomes more open minded. This factor should also be considered when morality is taken to influence the law.

Legal Protection for Composite Models: Functional Design Hybrids

(By Abraham Joseph, VIIth Semester, B.Com.LL.B., School of Legal Studies, CUSAT)

Keywords -- Intellectual Property, Functional Designs, Utility Models, Patent Laws, Design Laws, Innovations, Inseparability of Designs and Functions

Abstract

If the functional designs satisfy a specific level of inventiveness, then they can be patented. What if the design is inseparable from a functional utility which does not satisfy the degree of novelty prescribed by the Patents Act and hence cannot be classified as an invention? Can such functional designs be protected under the law of designs or could such functional aesthetic creations be protected under the law of patents? Numerous inventions or innovations are denied protection under the patent laws for not rising to the level of global novelty or not attaining the degree of inventiveness prescribed. The functional nature of the industrial designs and the applicability of the intellectual property laws are ambiguous in India as well as in numerous other jurisdictions. The aesthetics materialized in functional and technical cum utilitarian features i.e., when the aesthetics or ornamentality coexist with the functional features of the product, the suitable mode of protecting the intellectual property is indefinite. Numerous articles embody a design inseparable from the functional utility they have to perform. In such cases limiting the design protection to aesthetic features alone can be unpragmatic. Utility models will supplement the patent laws and design laws in the immediate future. This is the so-called need of the time; the utility models protect small scale innovations with practical utility accompanied with economic significance. We need a policy framework for the protection and commercialization of such innovations. The brighter future of the functional designs begins with the recognition of utility models. Utility models cover the blind spots left by the design laws and patent laws. This indeed is the best method of protecting the composite functional design hybrids.

Introduction

Intellectual Property Laws have become a common element in the majority of world’s legal systems today, encouraging the creation of a wide variety of intellectual goods and properties that include intangible creations of the human intellect. Intellectual Property laws give people and businesses property rights to the information and intellectual goods they create, providing economic incentives and benefits from the creations and allowing the innovators to protect their ideas and copying. Numerous products under a variety of brands rule today’s markets and the intellectual aspects involved in the making of a product influences the consumer preference. Protection offered by a registered design of a product or a patented invention is relatively much more than an unregistered or unprotected invention and design. This ensures the competitive position of the product firm in the market.  Industrial designs and patents are mutually exclusive of each other under Indian law as well as in numerous other jurisdictions. But the emerging composite product designs are hybrids of form and function. There exists a need for cumulative protection to such composite designs.

Matter in dispute

Patent Laws - exclusion of designs

Section 3(l) of the Patents Act 1970 excludes

Literary, dramatic, musical or artistic work or any other aesthetic creations including cinematographic works and television productions are not patentable as they are covered under the copyrights, design and entertainment laws.

The Patents Act 1970, along with the Patents Rules 1972, came into force on 20th April 1972, replacing the Indian Patents and Designs Act, 1911. One of the significant steps taken by the country towards strengthening of the patent laws was becoming the member of the Trade Related Intellectual Property Rights System (TRIPS). India also became a signatory of the Paris Convention and the Patent Co-operation Treaty on 7th December 1998 and thereafter signed the Budapest Treaty on 17th December 2001.

Section 3(l) of the Patents Act 1970: Literary, dramatic, musical or artistic work or any other aesthetic creations including cinematographic works and television productions are not patentable as they are covered under the copyrights, design and entertainment laws.

Patency stipulates the essential prerequisite of novelty of products or processes involving an inventive step capable of industrial application. The statute clearly excludes designs as they are aesthetic creations protected under Designs Act. The patent protection is exclusively confined to functional and structural features of technical significance.

Design Laws – exclusion of patents

Section 2(d) of the Indian Designs Act 2000, defines a Design as:

“design” means only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device, and does not include any trade mark as defined in clause (v) of sub-section (1) of Section 2 of the Trade and Merchandise Marks Act, 1958 (43 of 1958) or property mark as defined in Section 479 of the Indian Penal Code (45 of 1860) or any artistic work as defined in clause (c) of Section 2 of the Copyright Act, 1957 (14 of 1957).

As per the Act, design is confined to aesthetics and not the functionality/technicalities of the shape, pattern, form and configuration of an article. The definition expressly excludes any mode or principle of construction or anything which is in substance a mere mechanical device. Thus, the definition of designs and patents are mutually exclusive of each other. The element of technicality or functionality distinguishes both the terms.

According to the European Patents Office (EPO) Guidelines, a tyre tread is an example of anything that has both aesthetic appeal and practical value and might be patented. It has also stated that structures with distinct aesthetic appeal and usefulness may be patentable if they are a novel innovation with industrial applicability.

Conundrum

The Patents Act expressly excludes aesthetic creations. If the functional designs satisfy a specific level of inventiveness, then they can be patented. There are numerous case laws protecting patented inventions with graphical representations from parallel designs. This can be applied only when the aesthetic design is inseparable from an invention. What if the design is inseparable from a functional utility which does not satisfy the degree of novelty prescribed by the Patents Act and hence cannot be classified as an invention? Can such functional designs be protected under the law of designs or could such functional aesthetic creations be protected under the law of patents?

Numerous inventions or innovations are denied protection under the patent laws for not rising to the level of global novelty or not attaining the degree of inventiveness prescribed.  Prior art also poses a threat to numerous small innovations. Neither can they be protected under the design laws due to their functionality. 

Case Study

Functional designs

The functional nature of the industrial designs and the applicability of the intellectual property laws are ambiguous in India as well as in numerous other jurisdictions. Design is concerned with both form and function. Design law does not extend protection to those designs exclusively dictated by functions. The aesthetics materialized in functional and technical cum utilitarian features i.e., when the aesthetics or ornamentality coexist with the functional features of the product, the suitable mode of protecting the intellectual property is indefinite. Embracing one mode of protection enforces the renunciation of other forms of IP protection under the Indian Legal system as well as under many other.

The defense of functionality

The functionality of the industrial designs and the scope of their patentability has been approached differently in various cases settled by different courts. The design laws in India as well as in foreign jurisdictions have not been able to clearly define the scope of functional designs under the purview of industrial design protection.

No aesthetic consideration theory

According to a number of prominent rulings, the functional shape and configuration of an object cannot be registered as a design if the shape and configuration are exclusively influenced by the function it has to perform (no aesthetic consideration test). The restriction on design registration imposed by functionality is not removed by substantiating the fact that alternative shapes may accomplish the same result. All that has to be established is that the technical result is attributable to the essential features of the design. It is in this sense that the design is necessary to obtain the technical result.[1] An exclusively functional design cannot be claimed in design registration. If the overall appearance of a design is “dictated by” its function, it is invalid. However, “the design claim is not invalid, even if certain components have practical functions,” as long as the design is not predominantly functional.[2]

A prominent decision of Delhi HC in the year 1999 held that features of the parts of the crane were exclusively dictated by the functional utility.  The functional utility of the disputed parts of the crane to mechanically interrelate with other parts was attributed to the shape of those particular parts, and the resultant utility was the exclusive inspiration for that shape. This is a perfect example of must fit/must match designs. Those specific parts did not qualify as ‘design’ under the Indian Designs Act. The defence of the functionality of the designs was allowed and upheld. (Must-fit defence of design registration, though not defined by the Indian Legislations).

Multiplicity of forms theory

According to this theory if the same function can be achieved through other designs, then the defense of functionality must fail. For the defence of functionality to succeed, it is essential to establish that the “design applied for” is the only mode/option which was possible considering the functional requirements of the products[3]. Assuming that the design also performs a certain function, that by itself is not determinative of the exclusion of design registration, if there are other forms by which the function could be performed. It was essential to establish that the tread pattern of the tyre was the only mode/option, or one of the only few options, which was possible to achieve the functional requirements of the tyre”.[4] The learned court differentiated tread pattern from the treads of the tyre. The tread patterns did have a functional element in them, but that aspect was not the most prominent characteristic of the tread patterns; rather, the most prominent functional aspect of the tread patterns dwell in the treads themselves, not in the form or pattern in which they were organized.

A 2014 judgement delivered by a single bench of Bombay HC held that if the form of an article has only been partially dictated by the function it has to perform, the defense of functionality cannot subsist[5]. Mere relation of the form with the function is insufficient to establish the defense of functionality of the design. To establish the defense of functionality, it must be established that this is the only form which satisfies the functional requirements of the product. The existence of alternative designs renunciates the defense of functionality.

Factors dictating the choice of the customer

In a well-known judgement, the learned Lord observed, “The phrase ‘judged purely by the eye’ must be meant to prevent cases where a customer may choose an object of such shape not because of its appearance but because he felt the shape rendered it more beneficial to him.”. The House of Lords decided that the question to be decided was whether or not any aspect other than function motivated the customer, rather than whether no other shape was possible.[6]

Blending ‘no aesthetic consideration theory’ and ‘multiplicity of forms theory’

DOCERAM GmbH v Ceram Tec GmbH[7] is a leading 2018 decision by CJEU where the appellant raised a contention that when the features of the appearance of an article are exclusively dictated by the technical function, does the existence of alternative designs validate the registered community design. This indeed is a critical question that needs analytical reasoning, despite the fact that the Second Chamber held that existence of alternative design (multiplicity of forms test) is not a decisive factor.

But for determining whether the design was exclusively functional:

* The national court must consider all relevant facts in order to determine whether the product is exclusively inspired by its technical function; indicative of the reasons that dictated the choice of characteristics of the appearance of the product in question, or information on its use or application. Or

* other designs that perform the same technical function, provided that those conditions, facts, or information about the existence of alternative designs is backed by credible evidence

* There is no need to rely such conclusions on the perspective of an “objective observer” in this regard.

Of the decisions by the courts in jurisdictions worldwide some bank on no aesthetic consideration theory while some rely on the multiplicity of forms theory, either completely or partially. Some other decisions bank upon alternative theories.

Non separability of aesthetics and technical utilities

Various cases involve this issue where the shape of the product cannot be recognized as a trade mark as it has a functional aspect that is not separable from the aesthetic aspects of the shape. Numerous articles embody a design inseparable from the functional utility they have to perform. In such cases limiting the design protection to aesthetic features alone can be unpragmatic. How then can functional designs be protected?

Legislative intent of the non-functionality theory

The concept or the notion behind the non-functionality theory is that a wide number of articles to which the designs are applied lack novelty. They are already being manufactured in millions by the competitors in the market. Consequently, granting protection to such designs prevent the other manufacturers and competitors engaged in the field from manufacturing the same designs or utilizing the same principle. The design of the screw is exclusively dictated by the functional utility and the registration of that design would result in granting a monopoly to a single producer.

Limitation of the design protection only to the non-functional and ornamental aspects, excluding utilitarian and technical features, will not grant the monopoly of such features to the proprietor rather they would just prevent or disable the competitors from replication of the aesthetics of the said technique and functional utility.

Generally, the public necessity to access the patented technologies at the earliest without being economically exploited, does not exist in the field of the arts or with the aesthetic and ornamental aspects of product designs. Consequently, the conditions for the protection of such aesthetic non-functional contributions may be made less stringent. In India, the duration of the patents is 20 years and the initial duration of the designs are 10 years which can be extended up to 5 more years upon renewal.

Based on the analysis of the leading decisions and the opinion of the renowned jurists, the most appropriate legal theory to resolve the conundrum is the multiplicity of forms theory. Because if there exist alternate designs to achieve the same or desired function then the authorities should consider protecting such designs though they are functional. But the legal theory alone does no good. The theory can be resorted to only for the protection of pre-existing common functional designs in the market, and not for improvised novel functional designs and innovations. Analyzing the decisions settled by the Indian judiciary, decisions relying on the multiplicity of forms theory outweigh the decisions relying on the no aesthetic consideration theory or the exclusive functional dictation theory.

The mating mechanism of lock and key where there can be multiple designs that can achieve the same technical objective was held ineligible for design protection in an English case. There are decisions that rejected the design protection even if there are multiple options for achieving the functional objective. In the absence of multiple options to achieve the functional objective, how do we protect minor innovations including the novel functional designs falling short of the standards of patency and design registration?

The problem here is regarding innovations or novel functional designs lacking the degree of novelty to claim patency. The insufficient system of rewarding the innovators affects the R&D activities taking place in the small and medium sectors. The technology involved in most of the functional designs is simple mechanical engineering. But then, how can we protect minor inventions, improvisations and novel innovations which cannot have multiple formations?

Insufficiency of existing IP Laws

The number of domestic filings for design and patent registration conveys the status of research and development activities taking place in the nation. The insufficiency and insecurity of the IP laws to protect the creations and inventions is a determinant of the low rate of our design and patent applications. This unprotective environment affects the R&D activities taking place in the small and medium sector. The inability to protect the innovations is one of the major defects of the present system, whereas innovations happening in the small and medium sector results in simple devices with practical industrial utility. They have a shorter life in comparison with complex inventions. The domestic innovators and their investors in the small and medium sector play a vital role in the economic development of the nation.

Utility model: empowering the future

Utility models shall supplement the patent laws and design laws in the immediate future. This is the so-called need of the time; the utility models protect small scale innovations with practical utility accompanied with economic significance. We need a policy framework for the protection and commercialization of such innovations. Functional designs falling short of global novelty and degree of inventiveness shall no longer remain unprotected of patency. The requirement of the utility model is generally lesser than patency, even though it varies from region to region. The brighter future of the functional designs begins with the recognition of utility models. Utility models cover the blind spots left by the design laws and patent laws. This indeed is the best method of protecting the composite functional design hybrids.

India has strengthened its IPR policy accompanied by an initiative to enhance the IP assets and its generation by every type of investor. These initiatives also ensure a maximized and efficient commercialization of such IP assets.

Utility Model for functional designs and mere mechanical devices: Proposed Model Policy Framework

* Objectives of the proposed policy

The basic intention of the policy is to protect the articles which are neither entitled to the protection under the design laws nor under the patent laws. Any mode or principle of construction, mere mechanical device, re-arrangement or combination of articles, new forms of known substances etc. are unprotected under design laws and patent laws. There is a need to put a low-cost, quick-to-evaluate, and easy-to-apply tool at the disposal of businesses, particularly small and medium-sized businesses and researchers. Because they are no less worthwhile, utility model protection is preferable over the patency protection for technical innovations involving a low degree of inventiveness/inventions with minimal improvisation.

Criteria for Novelty

Less stringent are the requirements of novelty. The article or the device should meet the degree of inventiveness and local novelty to the extent of the prior art, prior publication of the device, prior public working or prior public knowledge. The novelty is founded upon the first to file principle. The device should also not be one that can be easily duplicated by a person skilled at the art. However, the degree of inventiveness and novelty is much lesser than that of patents. The novelty preferable here is a local novelty, as the devices are simple and have a localized industrial application. The requirement of global novelty is a criterion difficult for the minor innovations/simple mechanical devices to attain. The object of the policy must be to protect the domestic and indigenous innovations and R&D in the small and medium sectors within the state.

However, the device cannot be a registered utility model if it closely resembles a previously published utility model, or if it is similar to the description of a device in a utility model application filed in the domestic jurisdiction, or if it has already been notified in the state’s official gazette. In addition, violations of public order, morality, public policy, and health render the article ineligible for use.

* Grace period

A grace period of 12 months from the date of public disclosure of the article should be provided to the developers for protecting their innovations. The aforesaid protection shall be beneficial for the small and medium enterprises who can exercise their proprietary rights for devices and innovations having a shorter life.

* What cannot be protected?

Discoveries, scientific ideas, and mathematical theories, as well as aesthetic creations, plans, rules, and ways for executing mental actions, playing games, and doing business, are all examples. Methods of Commercial/financial accounting, testing and training methods, publications, lottery, and computer applications in general, operative or surgical procedures and diagnostic technologies for use on the human or animal body.

Registration procedure

The procedure ought to be simple, cheap and rapid. Only spick and span procedures can benefit the innovators and innovations. The shorter life span of the innovations necessitates immediate action. The proposed policy alternative must attempt to cure the defects of the existing system where the procedure of patency is complex and prolonged in India. It is ideal to keep the registration period between 6 to 12 months.

* Term of protection

The devices claiming the protection are generally less complex and have a shorter life, so the duration can be anywhere between ten to fifteen years. Since the life of the device is short the priority period proposed is 6 months.

* Proprietary Rights

The proprietor of the registered device shall have the exclusive rights of commercialization and licensing of the product.

* Conversion/transmutation

Innovations or inventions falling short of non-obviousness criteria or the degree of inventiveness are disentitled to patency. Those innovations have a higher commercial vulnerability of being exploited by the potential market competitors. Hence the provision to transmute the patent application to utility model application provides the rejected inven-tions/innovations with the alternative choice of the utility model registration and forthwith protect the innovation throughout the grace period from being replicated.

* Examination procedure

Proforma examinations are preferred. There ought to be no substantive examination of the innovation or the device. Since there is no substantive examination, the examination fee shall also be ignored. The requirements of patenting and design registration are very stringent and global in nature and at the same time, take a lot of time and very expensive. Due to these reasons, these small innovators and the Small Industry sector seem to have lost interest. On the other hand, the Utility Model System is less expensive, provides registration within a short time (maybe within less than six months) and need no substantive examination.

* This policy proposes that the device shall not be entitled to dual protection under patent laws and utility models.

* Penal provisions, procedures of application, search, examination, pre-grant and post-grant opposition, appeals, suits, licensing-compulsory and other, foreign filing of the application etc. yet to be proposed are left to the discretion of legislative bodies, corresponding ministries, departments, standing committees and the judiciary.

* Utility Patents should be cheaper to maintain and obtain.

* Utility models facilitate increased competitiveness among the small and medium sectors.

Conclusion

The National Innovation Foundation (NIF) is an autonomous body under the Department of Science and Technology, Government of India. Since 2000, the foundation has built up a database of more than 1,00,000 ideas, innovations and traditional knowledge practices from over 520 districts of the country.  NIF acquires the rights to such minor technologies and innovations, which are then licensed at low or no cost to small entrepreneurs and shared with the innovators. The idea here is that the state and not innovators should subsidize society. The innovator acquires a secondary title and the foundation acquires the primary title. The exclusive right of commercialisation is not vested with the innovator. This system ought to be remapped. The policy in brief aforementioned shall guide the legislative framework for the registration of utility models in India.

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Foot Note:-

1. Philips Electronics N.V. v Remington Consumers Product Ltd. [1999] R.P.C. 809 (ECA).

2. Sport Dimension. Coleman 820 F.3d 1316 (2016).

3. Cow and Coy v. Cannon Rubber Manufacturers [1959] 9 RPC 240 (CA).

4. Apollo Tyres Ltd. v. Pioneer Trading Corporation (2017) D.L.T. 488.

5. Whirlpool of India v Videocon Industries (2014) 60 PTC 155.

6. Amp.Inc. v. Utilux Pty. Ltd. [1972] RPC 103 (HL).

7. Case C-395/16 DoceramGmBH v. CeramtecGmBH [2018] 3 WLUK 165 (CJEU).

Right to Live and to Abort/Woman’s Right to Abort in view of

Medical Termination of Pregnancy Law in India

(By Swapna George, Asst. Professor of Law, CSI Institute of Legal Studies,
                                                                                        University of Kerala)

Justice lies in the balancing equilibrium of conflicting interests of individuals among themselves through the medium of legal provisions. Striking such an equitable balance between the conflicting right to life of a pregnant woman and interests of the child in the womb is not an easy task though not absolutely impossible one.

Right to life, considered as the most important of all the human rights, has been enshrined by the founders in our Constitution as a fundamental right in Part III. Article 21 of the Constitution, which is lauded as the fundamental of fundamental, guarantees the right to life and personal liberty. It says no person shall be deprived of his life and personal liberty except according to the procedure established by law. Judicial interpretation has further enhanced scope of this provision upholding that such law should have passed test of fairness as well¹. How high we hold the right to life and its value, significance and importance is evident and can well be perceived from the fact that the right to life cannot be suspended even under Emergency.

It has well been established by the Honorable Supreme Court through a number of landmark decisions that right to life doesn’t mean right to mere existence but it conveys the idea of leading dignified life of fulfillment ². Right to life aims at the accomplishment of fullest development and enjoyment of human beings. It, being the most important right, covers both Citizens as well as Non-Citizens.

Source of allied right of abortion

Article 21 is not just a right but it also serves as a never ending source of other human rights one among them being the invaluable reproductive right. If reproduction is more of a mere biological process in other living creatures it is not so in the case of human beings needs no explanations. Reproduction of human beings involves a number of social, economic, emotional and of course legal aspects as well. It involves crucial decision making in the process. Intellectual and emotional elements along with our family system play a key role making it a special kind of right derived from the aforesaid right to life. More importantly it covers right of a woman to or not to reproduce in the light of existing social viewpoint in this delicate matter.

In a society, like the one we are brought up in, whose social fabric has been woven to a great extent, with religious tenets as well as traditional morality, even the mere mentioning of the very question of right of abortion of pregnant woman evokes a volume of sentimental response. It has been a long pending question yet not answered with required amount of finality. Understandably, looking at abortion from legal point of view throws up umpteen numbers of other relevant issues in terms of rights including whether the right to reproduction carries it with right to choose abortion at the will of the pregnant woman. Can abortion be done at the mere demand of the woman treating it fully as a matter of choice of the pregnant woman? This question demands an elaborate and objective deliberation as it obviously involves right to child in the womb on the other end.

Morality and Criminality of Abortion

Though medically speaking abortion is a medical procedure putting an end to the pregnancy, it is not a simple topic to be digested in its full gamut as easily as we talk of. For the great majority of the people in our society abortion conveys a taboo, sin and moral wrong in their religious and conventional mindset. Abortion is considered as equal to the brutal killing of a living human being.

Law of land reflects existing social values and mores of the people living therein. Gone through our legal system, under Indian criminal jurisprudence abortion has been made a punishable offence. Abortion with the name miscarriage is treated as an offence under the provisions of the Indian Penal Code which has been drafted on the lines of English law.

Indian Penal Code, Section 312:--Whoever causes a woman with child to miscarry, shall if such miscarriage be not caused in good faith for the purpose of saving the life of the woman, be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both, and if the woman be quick with child, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Explanation – A woman who causes herself to miscarry, is within the meaning of this section.

As quoted above provisions of Section 312 of the IPC provides for punishment with imprisonment for committing miscarriage. All sorts of miscarriages excluding those performed for the sole purpose of saving life of the women are covered by the provisions. Not just that it does not provide exceptions, it carries much weight, at least for the question being put up herein, to take note of the fact that the even the mother has not been spared from the net of criminality. Moreover, having a thorough look at the explanation annexed to the provision makes it vivid that legislature has even brought the pregnant woman herself within the mesh of offence even specifically and categorically.

Things being so, with the object of setting off and compensating the inconvenience and dilemmas caused by the blanket criminalization of the miscarriage, especially those arising due to medical necessities, legislature has introduced Medical Termination of Pregnancy Laws. Medical Termination of Pregnancy Act, 1971 provides for termination of pregnancy under certain circumstances. Preamble of the MTP Act categorically says the legislative intention of providing for legal sanctity and exemption from criminality for termination of pregnancy by registered medical practitioners.

In fact the Medical Termination of Pregnancy Laws stands for the protection of registered medical practitioners from legal punishment of offence of miscarriage they cause in certain situations:-

Sub-section (1) of Section 3 of The Medical Termination of Pregnancy Act, 1971 provides that “Notwithstanding anything contained in the Indian Penal Code, a registered medical practitioner shall not be guilty of any offence under that Code or under any other law for the time being in force, if any pregnancy is terminated by him in accordance with the provisions of this Act”.

Mere verbatim reading of the said provision leaves no doubt as to the fact that the key role played by the law is protection of the doctors. As per the provisions of the MTP law pregnancy can be medically terminated up to 12 weeks of gestation period with the medical opinion of a registered medical practitioner and up to 20 weeks if supported with opinion of two medical practitioners, which has now been amended and consequently the period stands extended to 20 and 24 weeks respectively.³

Under these provisions termination of pregnancy can be carried out in case of any risk to the life of the pregnant woman or of grave injury to her physical or mental health. Similarly termination of pregnancy can be done in case of any substantial mental or physical abnormality to the child.

Section 3 further says that the miscarriage can be caused within the aforesaid period if the medical practitioners are of the opinion that:-

   (i)   the continuance of the pregnancy would involve a risk to the life of the pregnant 

         woman or grave injury to her physical or mental health; or

 (ii) there is a substantial risk that if the child were born, it would suffer from such
physicalor mental abnormalities as to be seriously handicapped.

The relevant provisions of the Medical Termination of Pregnancy Act cited above read together makes the picture crystal clear that it deals with protection of medical practitioners from being punished as abortionists as per the provisions of Indian Penal Code if they cause abortion to any pregnant woman supported by the opinion that such an abortion is necessary due to any injury to the pregnant woman or abnormality to the child in the womb. Under no circumstances, even in the widest possible stretching of the ambit of the any of the existing provisions of law, termination of pregnancy has been considered as the right of the pregnant woman. Abortion is legally permitted only in cases where they are supported with medical opinion of the registered medical practitioners as aforesaid.

In short, termination of pregnancy stands legally permitted only on the medical grounds but never on the basis of the concept of right of the pregnant woman to choose. Abortion as a right to choice coupled with the idea of autonomy of the women over her body finds not place or even an iota of mention in the existing provisions of law.

Right to Abort and Autonomy over Body

At this juncture things need to be taken from the perspective of right of a pregnant woman to abort at any stage of the pregnancy or up to what stage of the pregnancy. In terms of the right of woman to abort on demand the very first thing to be discussed is the extent of autonomy of woman over her body. Autonomy of the woman over her body is a matter to be seen from a different context by all means. The subject of autonomy of body taken in terms of the question of abortions poses a few other crucial questions for consideration. Do people have absolute autonomy over their life? Is the pregnancy to be taken as part of the body of the pregnant woman as her other organs? Even if treated as part of the body for the sake of argument how far the autonomous rights can be granted for the woman on her womb?

When things are viewed from the right point of the pregnant woman, rather than based on medical necessities, termination of pregnancy comes as a matter of choice of the women in terms of the body autonomy. To a great extent, in accordance with the growing thought process, though limited within a small section, embryo and fetus are treated more as part of the woman’s body over which she has to be given choice whether to continue or terminate. This theory is buttressed by the right to life which guarantees dignified life and also by the bigger role played by the woman in giving birth to a child. It has got its own merits warranting genuine considerations and deliberations among us.

Right to child in the womb

Doing strict justice to the argument that a coin has two sides, now the other side of the topic of right of woman to abort hast to be turned around for a look at the right of the child to be born alive. Here also we are to face a number of questions on the personality and right of child in the womb. Do we have to assign legal personality to embryo or should it be assigned when the embryo turns into fetus? Does an embryo have life? If not at what point in time we can decide that life has been formed? In the run to find an answer to all these questions it would be worthy to refer to the few existing provisions in regard to the status of an unborn person.

Property law in India which permits transfer of property between living persons treats child in the womb a person. As per the provisions of the Transfer of Property Act property can validly be transferred to an unborn person, even not in existence.

Transfer for benefit of unborn person:--Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.⁴

Though the aforesaid provision is bit out of context it sheds a message that legal right may travel even to the non-born. In a little contrast with the property law provisions of criminal law defining the offence of culpable homicide deliberately omits child in the womb from its purview. It says as follows

Explanation 3– “The causing of the death of child in the mother’s womb is not homicide”.⁵

When causing of death of a person is offence of culpable homicide, causing death of child in the womb has been excluded; sending a clear message of the legislative intention that child in the womb is not treated as a person, at least for constituting the offence of culpable homicide.

Similarly given a liberal interpretation in terms of right to life and right to equality some sort of legal personality seems to have been conferred to fetus with respect to pre natal determination of sex. Apart from these legal provisions relating to miscarriage, medical termination of pregnancy, property law, criminal law on homicide, sex determination it is seen that our legal system lacks sufficient laws on the legal status of child in the womb.

Conflict of rights

Every right held high by the society is in contrast with other rights of the same person or the others. Conflict of rights is an inevitable foundation upon the conciliation of which legal justice is served. Same is the scenario in the matter of the right to choice of the pregnant woman to abort and the right of the child in the womb to be born alive. In a recent judgment of the High Court of Kerala dealing with a similar situation the moment of start of heartbeat was taken as the point infusion of life into fetus entitling it to right to life embedded under Article 21 of the Constitution leading to the conflicting point of right of mother and child over womb. Relevant portion of the judgment reads as follows:⁶

“An unborn child has life of its own and rights of its own and the rights of unborn are recognized by law. No doubt, only if the unborn can be treated as a person, the right to life of the unborn can be equated with the fundamental right of the mother guaranteed under Article 21 of the Constitution. True, an unborn is not a natural person, but it is well known that after six weeks, life is infused into the embryo, thus converting embryo into foetus and once an embryo evolves into foetus, the heart beat starts. In other words, the unborn has life from the stage it transforms into foetus. If the unborn has life, though it is not a natural person, it can certainly be considered as a person within the meaning of Article 21 of the Constitution, for there is absolutely no reason to treat an unborn child differently from a born child. In other words, the right to life of an unborn shall also be considered as one falling within the scope of Article 21 of the Constitution”

“….When duly constituted Medical Board opines that the stage of pregnancy is such that it may result in a live baby and that the foetal abnormalities diagnosed are not lethal, in the absence of any threat to the life or health of the mother, I am of the view that the reproductive choice of the mother which is a facet of the fundamental right guaranteed to her under Article 21 of the Constitution, will have to give way to the right of the unborn to be born.”⁷

As understood from the afore cited observation of the Court, it is simply perceivable that in terms of the prevailing legal structure termination of pregnancy is allowed to be accessed only for the purpose of saving life of the woman from any injury or in case of lethal abnormalities to the child. Nowhere the aspects of right of the pregnant woman exercisable at her choice have been seen considered.

The road ahead

Laws are not dead letters. They are organic in nature and functional in spirit. Changes in the thought process and values of the society are reflected in the laws through legislative mechanism.

Various aspects and dimensions involved in the matter of abortion being legally permitted at the mere demand of mother in the light of right to life of the child in the womb need to be given immense attention of the legislature.

Viewed from the point of view of legal rights of the unborn it warrants clarification of the concept of legal personality of the unborn at the very outset. Answer of it need to match with yet other question of availability of fundamental right to child in the womb over and above the right to life of the woman. Until this area is clearly demarcated at least in terms of theoretical certainty in the words of legal language no rest will be attained over the topic of right to abort.

Right to life of the child in the womb and woman’s right to abort, which is also a facet of the fundamental right protected by the Constitution, have to be approached with an objective mindset. Mind with any sort of influence of even an iota of religious beliefs, customary norms or moral sentiments will never take one to the expected level of finding and serving legal justice.

There exists an absolute vacuum as to the rights of woman and her choices in relating to termination of pregnancy, nor is it anywhere mentioned whether the child in the womb is to be considered as part of her body giving her full autonomy over it or not. There exist opposite views among the people as to the position of the woman in regard to the child in her womb.

Next is to settle the autonomy aspect of women over their body and right to life of the child in the womb. Women have right over their body and dignity as part of the right to life. Their reproductive right carved out of the right to life gives them autonomy to the women to decide on the aspects of pregnancy. Child in the womb if considered as a person entitled to right to life under Constitution; its life need be legally protected under all the circumstance. Claims in terms of the right to life of the child in the womb and right to body autonomy of the women have to be balanced and a conclusion has to be reached tilting the scale in accordance with progressive human rights jurisprudence as objectively as possible.

All this matter requires is being taken up with legislative wisdom and being filled up with comprehensive legal provisions strong enough to clear away the prevailing grayness from this area.

Foot Notes

1.    Maneka Gandhi v. Union of India (1978 KLT OnLine 1001 (SC) = (1978) 1 SCC 574).

2.   Bandhua Mukti Morcha v. Union of India (1984 KLT OnLine 1212 (SC) = (1984) 3 SCC 161).

3.    The Medical Termination of Pregnancy (Amendment) Act, 2021.

4.    Section 13 The Transfer of Property Act, 1882.

5.   Section 299 The Indian Penal Code.

6.    Indulekha Sreejith v. Union of India (2021 (5) KLT 244).

7.   Ibid, para 9.