Strengthening accountability: Delhi High Court's landmark ruling on Patent Agents' conduct and need for reform

There have been debates and court room comments on the conduct of Patent Agents over the past few years particularly since the Intellectual Property division has started working in the High Court of Delhi. Recently, the Delhi High Court proposed a code of conduct for IP Agents in the case of Saurav Chaudhary vs Union of India & anr (2024:DHC:4946)..The petitioner’s application was abandoned due to the Patent Agent’s failure to respond to the First Examination Report [FER], leading to the loss of valuable intellectual property rights for the petitioner. Despite the petitioner’s consistent follow ups, negligence and communication breakdown on the part of the Patent Agent resulted in the abandonment of the application.The petitioner then filed the present petition for restoration of the patent application.The petitioner relied on European Union Represented by the European Commission v. Union of India and Ors. 2022:DHC:2301 which held that, under exceptional circumstances, the High Court can exercise power under Article 226 of the Constitution to condone delay. The petitioner submitted that the present case falls under ‘exceptional circumstances’ as the Patent Agent failed to respond to the petitioners’ emails/ follow ups and missed the crucial deadline to file the response to the FER.The Patent Agent admitted that there has been no written communication or email from his side except through telephone calls. The Patent Agent also argued that the petitioner failed to provide proper instructions and hence the reply to the FER could not be filed.On behalf of Controller General of Patent, Design and Trademark, [CGPDTM] it was submitted that the FER was available on the internet and that the petitioner ought to have checked it, and thus decision in the European Union represented by European Commission (supra), could not be applied to the present petitioner.The Court opined that a patent application is a valuable asset for an individual inventor such as the petitioner. However, most inventors and clients may not have the resources or technical expertise to access the IP office website and hence the availability of access to the IP office website could not be considered as a valid and sufficient defense for the CGPDTM. Given the circumstances, the Court opined that the petitioner had taken steps to try and apply for the revival of the patent application at the earliest opportunity.The Court held that the facts of the present case fall within the ambit of ‘extraordinary circumstances’ and set aside the abandonment order of the patent application and directed the Patent Office to accept the physical/ online reply to the FER from the petitioner..The Court observed that the lack of diligence by Patent Agents results in patent applications being abandoned or lapsed. The lack of diligence may trigger the mandatory provisions of the Act, thereby resulting in abandonment of the application itself, without further scope for revival. This lack of due diligence could be termed as a ‘misconduct in his professional capacity.’As per Rule 114 under Chapter XV of the Patents Rules, 2003, Patent Agents can be disqualified and removed if the Patent Agent is found guilty of ‘misconduct’ in his ‘professional capacity’.However, there are no Rules of Conduct for Patent Agents, and the term “misconduct” is not defined either under the Patent Act or the Patent Rules, which is an oversight in the system.The Court perused and discussed the code of conduct for other professionals like advocates and chartered accountants, and observed that there is an imminent need for a similar framework to be established for regulating the conduct of IP Agents and for providing a mechanism for lodging a complaint against an IP agent. There was a pressing need for prescribing factors that would constitute misconduct, for setting out the procedure of complaint and its dealings, and also for prescribing penalties and punishments.The Court also opined that a Code of Conduct must be prescribed separately for the different levels of duties of patent agents:Duties to their clients/ applicants of patents;Duties towards the IP office;Duty to society in general; andDuty to courts if and when they appear and exercise the right of audience.The said code of conduct should include the patent agents employed by partnerships, IP law firms, and even general practice law firms and should not be limited to only individual patent agents.The Court has also noted that "misconduct" by the patent agents could include:“The commission or omission of an act that constitutes a breach of ethical or professional obligations –wherein such behavior, whether intentional or negligent, contravenes established standards of practice.If the same causes harm to clients, diminishes their trust, compromises the patent agent’s integrity including failure to uphold the principles of honesty, morality, accountability, and professionalism.".The Court further addressed the issue of solicitation and the recent trend of misleading promotion on the part of companies, entities etc., including IP professionals. The Intellectual Property Attorneys' Association (IPAA), who intervened in the matter, highlighted issues related to advertising of legal services, misleading and misrepresentative promotions of IP services by companies and entities including IP professionals along with few advertising representations.IPAA submitted relevant provisions from the statues governing Patents and Trademarks which deal with professional negligence, professional misconduct or dishonesty, committed in a professional capacity and disciplinary proceedings against patent agents and trade mark agents for such misconduct.The Court also observed that some websites were offering services which were misleading and misrepresentative in nature. The services offered were specified on the website of lawyers and law firms, and representations included “Get trademark registration in 1 day”, special offers, discounted fees, lowest prices, “Get in one day” promises, etc. The deceptive and illusory claims were misleading, and applicants could fall prey to the same, the Court noted. To counter such false advertising, the Court directed that:“ 65. ………. Whenever there is any offering of service for trade mark or patent registration, it should be compulsory for the name of the registered Agent and the registration number to be mentioned so that the promotional material can be linked back to the person who is responsible. Without such safeguards, there is in effect no accountability whatsoever and genuine applicants and their rights may be severely jeopardized.”.The Court acknowledged that while Patent Agents, Trademark Agents and other similar agents could have a website giving contact details and other material relating to their services, the Controller General ought to curb misleading and misrepresentative advertising in the larger interest of the profession and applicant..In view of the same, the Court passed the following directions:A draft Code of Conduct be prepared to regulate Patent and Trademark Agents and put up by the CGPDTM on its website within two months for stakeholder consultation and to notify the same within a period of 6 months, latest by December 31, 2024. A framework be prepared within the said period, for dealing with complaints against Trademark Agents and Patent Agents. An ad-hoc committee be formed, consisting of at least two officials from the trademark/ patent office and one senior IP practitioner with at least 15 years of practise and also registered as a Patent/Trademark Agent for dealing with the complaints filed against any Trademark or Patent Agent before the office of the CGPDTM. .The Court has stressed the necessity for a well-defined code of conduct to ensure Patent Agents uphold professional standards and protect the interests of their clients. The Court has also highlighted the importance of accountability and transparency in the IP profession, calling for stringent regulations to address negligence and misconduct. The Court has further expressed concern over misleading and misrepresentative promotions for IP filings and mandated that the name of the registered Agent and the registration number be mentioned on such promotions to ensure accountability as the Agent.Moreover, the Court has directed the CGPDTM to take strict actions against IP agents publishing such misleading and misrepresentative advertisements.While firms and agents can publish their basic details on a website alongwith the services offered, they should be vigilant and desist from publishing misleading or misrepresentative information in their promotions and advertisements. Such practices could constitute professional misconduct and may result in strict action from the CGPDTM.The Court directed that a framework be put in place for dealing with complaints against Trademark Agents and Patent Agents, and until such framework is in place, complaints, if any, filed against any Trademark or Patent Agent before the office of the CGPDTM should be considered and decided by an ad-hoc committee consisting of at least two officials from the trademark/patent office and one senior IP practitioner with at least 15 years of practise and who is registered as a Patent/ Trademark Agent. The Court further directed that such ad-hoc committee be notified within two months.This is a landmark judgement as it attempts to plug many inadequacies in the system by formulating a Code of Conduct for IP Agents, addresses the issues of misleading and misrepresenting advertisements and claims regarding IP on the internet and otherwise and takes firm steps by directions to form a framework for complaints against such agents.Though the whole process of holding the IP Agents accountable is still in a nascent stage and will go through many more changes before being confirmed, the judgement is the first step in the right direction. .About the authors: Mahua Roy Chowdhury is the Managing Partner of Royzz & Co. Muthu Pandi is a Partner at the firm.