“Sometimes it is wiser to step back and acknowledge than to stand up and confront” – a popular epigram summarizing the ostensible intent behind surrendering a patent (in idiosyncratic circumstances) by a patentee in India. While it might be a strategic decision (or based on a number of other reasons), surrendering a patent, and in turn the rights conferred upon the patentee by the grant of such patent, is an important provision provided in the Indian patents regime.
Cases where the patentee can opt for surrendering his patent
- A patentee wishing to avoid his patent being challenged by an opponent, thereby leading to invalidation of his patent.
- A patentee wishing to achieve commercial certainty of revocation of the patent faster than the option to allow revocation by lapse in payment of fees.
- In any other circumstances wherein the patentee no longer wishes to maintain his patent but does not accept that the patent be declared invalid and ought to be revoked.
Statutory basis and procedure for surrendering the patent
Section 63 of the Patents Act, 1970 provides that the patentee may, at any time by giving notice in the prescribed manner to the Controller, offer to surrender his patent. The official fees for providing such an application through online mode is Rs. 1000 /- for natural persons or startups or small entities or educational institutions and Rs. 5000 /- for others as mentioned in the First Schedule of the Patents Rules, 2003.
It is further provided in Section 63 that the Controller shall publish the offer for surrendering the patent in the prescribed manner (in the Journal), and also notify every person other than the patentee whose name appears in the register as having an interest in the patent. Serving the notice of surrender on all persons whose names appear in the register as persons having interest in the patent by the Controller is an important measure incorporated by the ‘Report on the revision of the patents law’ presented by the Justice Ayyangar Committee in 1959.
If any person interested is aggrieved by the surrender offer, he may within three months from the date of publication of the notice by the Controller, give notice of opposition to the Controller in Form 14 in duplicate. The Controller shall provide an opportunity of being heard to the patentee as well as the opponent and if the Controller is satisfied after the hearing that the patent may properly be surrendered, he may accept the offer and, by order, revoke the patent. An important provision while surrendering the patent is that there is no need for the patentee to give the reason or motivation for the offer of the surrender.
Interplay between Section 63 and Section 64
According to the precedent cases in the Indian patent regime, there is a distinction between surrender of a patent and its revocation in a court. Instead of surrendering his patent, the patentee can alternatively choose to let his patent lapse through non-payment of the renewal fees. However, it would take 18 months after the last renewal date of the patent for it to lapse and consequent automatic cession of patent with no chance of its restoration.
The patent revocation by these two methods is not only distinct but also has a very different effect on the enforcement of past and future infringement actions. For instance, if a patent is allowed to lapse due to the non-payment of the renewal fees, or if it is surrendered in the national proceedings, its revocation would not have a retrospective effect. In contrast, if a patent is revoked by the court in any counterclaims for revocation, such revocation would be deemed to have never existed ab initio. The surrender of a patent is not retrospective and the patent would be in force and effect from grant until surrender. When the patent is surrendered, it shall be considered that the patent has never existed and thus ending all the financial agreements made based on the patent.
Cases pertaining to surrender of patents in India
In the case of M/S MYLAN LABORATORIES LTD. vs ICOS Corporation, the IPAB held that in the event of an offer of surrender of a patent by a patentee, the Controller has to follow the procedure contemplated under section 63 of the Act. Therefore, as long as the surrender proceedings are pending and unless and until the Controller accepts the offer of surrender the impugned patent to be in existence and continued to be in the register. The IPAB further provided the patent to be revoked using grounds under surrender and rejected revocation proceedings under section 64. No costs were offered as brought out by the plaintiff in the revocation proceedings under Section 64 and instead the IPAB ordered the patent to be revoked within 6 weeks from the date of receipt of the order.
In another instance, the Controller revoked patent no. 216922 on an offer made by the patentee to surrender the patent. There was no opposition notice received by the Controller within 3 months of publishing the applicant’s request to surrender the patent and the patent was subsequently revoked by the Controller.
Surrendering the patent is a good statutory option available to the patentee to safeguard his financial interest prior to making an offer for the surrender. Any payment made under the patent prior to the date of the acceptance of the surrender application would not be put at risk and surrendering the patent would not adversely affect the continuance of the revocation proceedings in the court. However, the Controller may not proceed with the acceptance of the application till the outcome of the revocation litigation. In case the patent is revoked, it would mean that the patent would be deemed to have never existed and thus subjecting all the financial agreements made earlier at risk.