Deference, Not Delegation! – WIPO PCT Negotiations 17/06/2018 by Intellectual Property Watch 1 Comment Share this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) The views expressed in this article are solely those of the authors and are not associated with Intellectual Property Watch. IP-Watch expressly disclaims and refuses any responsibility or liability for the content, style or form of any posts made to this forum, which remain solely the responsibility of their authors. By Sandeep K. Rathod and Dr. Feroz Ali The meetings of the Eleventh Session of the Patent Cooperation Treaty (PCT) Working Group start from the 18th of June at Geneva at the World Intellectual Property Organization. One of the key discussion items is the session on Proposal for ‘Delegation of Designated or Elected Office Functions’ (the ‘Delegation Proposal’). The working document for this session is available at the PCT site. This Proposal seeks to amend the PCT Regulations so as to provide Contracting States with the possibility to delegate designated and elected Office functions to the Office of any other Contracting State or an intergovernmental organization. In the present scheme of things within the PCT legal framework, a PCT Member State can only close its national (direct) patent filing route for a patent applicant at such Member State, only if the Member State is also a party to a regional patent treaty. In such a situation, where a Member State has closed its national patent filing route, the regional Office acts as the competent designated or elected Office so allow a patent applicant to seek patent protection in that Member State via the regional patent treaty route. As such, there is no express provision in the PCT today that would allow a State which is not party to a regional patent treaty, to close its national patent filing route in a way so as to allow delegating its designation and election functions to another office/ patent authority. By way of background, the Delegation Proposal states that ‘… it may be desirable in some instances for a Contracting State which is not a member State of a regional patent treaty to delegate some or all of the PCT functions usually carried out by its national Office, notably for reasons of efficiency, economy, capacity or any other purposes.’ The Delegation Proposal proposes to amend the PCT Regulations that would expressly allow a Contracting State to delegate its designated as well as Office functions to the national Office of any other Contracting State or to any intergovernmental organization. Once such an Office or intergovernmental organization (to which those functions have been delegated) assumes the rights and obligations from the “delegating” Contracting State, it would perform all delegated functions. Significantly, between countries, a mechanism can be brought into operation only through a bilateral agreement like bilateral investment treaties (BITs). In simplest of terms, this voluntary or opt-in type of arrangement, for the sake of economy or reducing complexity or on account of lack of resources (manpower/ technical), would allow a Member State to ‘outsource’ its patenting mechanism to another country/ regional treaty office even if it is not a member of such regional treaty. For developing countries like India, which have a reasonably strong patent examination cadre, it may not make sense to opt for this outsourcing mechanism. However, for countries that do not yet have a strong patent examination cadre, this mechanism may seem very appealing – at least in the short term. This outsourcing arrangement would mean that they can grant patents and thus could be seen as appealing destinations to foreign investors (for instance) while not incurring the full costs for developing a full patent office. Local Capacity on Patent Prosecution However, such an ‘outsourcing’ arrangement is not without its pitfalls. For one, a patenting office with a full-fledged examination cadre acts a core component in capacity building for the Member State and serves to protect against imposition of TRIPS plus provisions by being an active part of the national policy discourse. Once a Member State outsources its patenting function to an outside agency, it loses effective control on the quality and scope of patents that are granted for its territory. This also means that an important policy tool for developing IP in the country and access to drugs, enablement of national technical development, is effectively kept locked away in a foreign land. [note: TRIPS is the 1994 World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights] For such countries, rather than opting in for full-fledged ‘outsourcing’ of their patenting function, it may be a better idea (in the long term) to develop their internal patent office cadre, develop appropriate IP policies best suited to their stage of development and at the same time, giving deference to the patenting decisions of like-minded countries. Maintaining a balance between deference to foreign decisions and granting appropriate national patenting practices will lead to long term advancement of the country’s interests. By developing local capacity to grant and reject patents, countries will make a critical contribution to the development of patent law jurisprudence, which now shows signs of becoming monolithic, exclusive and regressive. Deference is Better Rather than delegating prosecution function hook, line and sinker, countries with lesser capacity will gain immensely by showing deference to grant and reject decisions of other patent offices of their choice. This can be done without the burden of a bilateral agreement. India’s patent law has a provision (section 8) which requires patent applicants to disclose the status of international application until the grant to their Indian patent application. This offers the Indian Patent Office insight into how the other Patent Offices have treated that patent application. Having such provisions in the patent law will give an opportunity for a developing country to show deference to decisions of other patent offices. Let’s look at a hypothetical case involving a patent application for a life-saving drug for which patent applications are filed throughout the world. If country A (say, a developing country) has a delegation agreement with country B (say, a developed country), the grant of the patent in country B will automatically result in an enforceable patent in country A. Country A will not be able to benefit from the merit of a patent office decision in another country, say India or Brazil, where the patent application came to be rejected by an office action or pre-grant opposition by NGOs. Developing countries will stand to benefit more by showing deference to decisions of like countries, rather than delegating the power to make those decisions. BITs and Higher IP Standards Further, the means by which this mechanism would work is by the delegating Contracting State having a “delegation agreement”, a bilateral agreement with another Contracting State. As it is, there is a danger of bilateral investment treaties (BITs) increasing the patentability standards and providing for TRIPS-plus provisions. Over the years, due to the failure of multilateral treaty negotiations, BITs have become the default choice for raising the IP standards. BITs have resulted in countries having higher IP standards by increasing those standards in developing countries one at a time, eventually resulting in all the countries having the same standard. As this proposal can only be implemented by a bilateral agreement, there can be no doubt that developing countries will have a new thing to worry about when their investment partners push for higher IP standards through BITs. It is not too far-fetched to imagine a situation where developed ‘investor’ countries ‘persuade’ developing or least developed countries to hop on to such outsourcing arrangements to secure their technical innovations. This could result in the ‘ever greening’ type of patents common in developed countries being granted in such developing or least developed countries, adversely impacting the national interests of such countries. Harmonizing Substantive Patent Law By granting a Contracting State the power to grant and reject patents of another State, this proposal will be tantamount to introducing substantive patent law provisions through the backdoor: an endeavour to harmonize substantive patent law that the WIPO has failed to achieve over the years. Like the effect of BITs in increasing the standard of IP protection by targeting developing countries one at a time, this arrangement when implemented on a large scale, will have the effect the defunct substantive patent law treaty failed to achieve. Sandeep K. Rathod is Vice-President and General Counsel at USV Private Limited (India) and Dr. Feroz Ali is the IPR Chair Professor at Indian Institute of Technology Madras.  http://www.wipo.int/edocs/mdocs/pct/en/pct_wg_11/pct_wg_11_7.pdf  http://www.wipo.int/patent-law/en/draft_splt.htm Image Credits: WIPO Share this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related "Deference, Not Delegation! – WIPO PCT Negotiations" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.