Recently, the Central Government by way of an Ordinance — namely the Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021, published in the Gazette of India dated April 4, 2021 — abolished the Intellectual Property Appellate Board (IPAB) along with a host of other tribunals and proposes to transfer its powers to High Courts (for a patent, trademarks, GI, plant varieties related issues) and to Commercial Courts (for copyright matters).

Some of the pertinent questions are addressed as under:

Why did the Central Government abolish IPAB? Was it well-reasoned?

The ordinance aims to streamline the tribunal system in the country and bring about a change in the efficiency and adjudication of IP disputes across the board in turn to reduce the cost of expenditure ranging from lack of infrastructure, operational expenses—draining the national exchequer—to delay in appointment of technical members, high pendency of cases, access to justice, quality of appointment of members of the IPAB, and the risk of ‘capture’ by attorneys practising in two particular cities—Delhi and Chennai, as being alleged, to ensuring speedy justice and so on and so forth.

No, it is somewhat not well-reasoned enough, the factual data and its explanations are flawed to say the least. Handpicking data from the past three years and concluding that the IPAB did not deliver speedy justice and ultimately caused a considerable expense to the exchequer can be countered by the fact that it was barely given the chance to function to its full potential in the first place due to non-appointment of chairman and technical members since its inception. To corroborate, recent data actually shows that in the last six to eight months when the IPAB functioned with full strength, the disposal rate was quite good. Now, the question of transferring matters to the already over-burdened High Courts seems unreasonable without any pre-existing time-bound mechanism in place. It would prove to be cumbersome for an applicant to seek registration of its trademark/brand in case of an appeal against the decision of the Trademarks Registry for example.

Will the rationalisation of IPAB burden the already over-stretched High Courts?

I would say that before putting forth their reasoning in the public domain or abolishing the tribunal system completely, it would have been better if they approached all the stakeholders concerned, developed a mechanism in place simultaneously for smooth transfer of cases from IPAB to respective courts, eased out the procedural compliances, filled up the posts of judges and technical members, built world-class infrastructure, etc. This has not been done.

The constant delays and pendency were mainly due to the long vacancies. Now, the transfer of cases to High Courts may lead to additional burden wherein commercial division of the courts deals with all kinds of commercial matters (and not only relating to IP), and that may lack basic technical knowledge mostly in the domain of patent law for that matter.

How will the adjudication of IP matters be carried out going forward?

As per the provisions of the Ordinance, all appeals against the decisions of the Registrar of Trademarks, the Registrar of Geographical Indications and the Controller of Patents would now be filed before the concerned High Courts and all appeals against the decision of the Registrar of Copyright before the concerned Commercial Courts including the Commercial Division of the High Courts. The appeals pending before the IPAB, as on April 4, 2021 would be transferred to the respective High Courts whereas the appeals filed under the Copyright Act, 1957 would be transferred to the respective Commercial Courts. However, the Bill is yet to be passed and enacted as law.

4. What does an IP holder need to know as to the current date?

IP holders would have to bear the brunt and should prepare themselves for more delays while the files are transferred from the IPAB to commercial courts after the bill is passed. Alternatively, they would have to anticipate early on as there may be Patent terms, which may be set to expire before the Appeals from the order of the Controller are heard by the Courts. Also, if you have hired a patent agent to represent your case at the IPAB or at the Registry, you may have to incur additional costs to hire an arguing counsel to present your case before the High Courts in case of an appeal in addition to incurring filing costs.

What is the way forward?

Well, the bill is likely to be discussed in the Parliament in the coming months, and if passed would cause a tectonic shift in the way the IP fraternity functions.

The Central Government should form a committee of all IP stakeholders - invite their objections, consider them and implement the bill holistically moving forward after designing a well thought out plan to enable continuity and maintaining efficiency. Set up specialised IP benches within the court structure, appoint court-appointed experts—invite applications (to be scrutinised thoroughly), fix timelines for speedy disposal in order to build an ecosystem that is encouraging with better innovation, leading to technological advancements and growth as an economic superpower.