Disclosure Of Trade Secret On The Path To A Patent: Lacunae In The Law

The term “patent”^[1] refers to an exclusive monopoly or right that has been granted to the inventor for a particular product, or the process that goes into the making of the product. This could either be because it offers the general public a novel method of using a pre-existing procedure, (or process) or a new device which provides a solution to an already existing problem (product). When a patent is granted, it gives the owner the right to prevent other individuals (competitors or otherwise) from using their technology or product for commercial gain for the next twenty years after which, it enters the public domain, and becomes free for commercial use and exploitation. However, the caveat to this is that the patent holder must disclose the technical aspects of the process or product, so that the rest of the world can understand it, enabling them to create other goods and services in the future, possibly leading to other similar patents.

Considering that the granting of a patent results in a monopoly for the next twenty years, the government must be careful in granting of patents in order to ensure that a healthy competitive market isn't destroyed. Therefore, there are certain criterion that the product or process must pass prior to the grant of the patent.

WIPO defines a trade secret as “Intellectual property rights on confidential information which may be sold or licensed”.^[2] There are typically three criteria for the same for which the law affords some form of relief through contracts or otherwise. They are:

• It should not be general information to individuals who deal with the subject matter at hand.
• It must hold commercial value.
• The owner must take reasonable steps to protect the secret.

India has two processes of patent granting. One is the Pre-Grant opposition^[3], and the other is the Post-Grant opposition.^[4]

Opposition proceedings refer to a procedure available to third parties to challenge the grant of a patent Pre or Post-Grant of the patent. It is done to ensure that there are no false, or frivolous claims. These opposition proceedings allow for individuals and especially corporations to point out similar procedures, or patents that have already been filed in the past.

Section 25(1) of the Indian Patent Act, 1970 allows for Pre-Grant opposition in India. The opposition may be filed by any individual or party prior to the granting of a patent, in writing, post its publication.

Due process is followed with regard to opposition proceedings wherein if the opposition is found to have merit, the individual filing for a patent is sent a notice that is required to be answered within a three-month timeframe. After this, there are three possibilities that arise. The Controller may either grant the patent, refuse the patent, or ask for an amendment of the patent.

Post- Grant opposition works similarly, except, as the name suggests, it is an opposition that is made post the granting of the patent. This can be filed under section 25(2) of the Patent Act. The Post-Grant Opposition however has limitations, as it can only be filed by an interested party, which includes individuals in research, or an entity that engages in the commercial aspects of the patented good or service. This may be filed within 12 months from the date of grant. There are no differences in terms of reasons regarding why a patent ought not to be granted, and the parameters are the same as those related to Pre-Grant opposition. In addition to this, one can file for an appeal in Post-Grant oppositions as well. Which means that one can affectively file three oppositions, one Pre-Grant, one Post-Grant and one appeal.

Examination of the Indian Patent system of Opposition

Publication and Pre-Grant opposition^[5],^[6]

*Data is not available

In the year 2021-22, 481 Pre-Grant oppositions were filed, with 275 of them being disposed off. In addition to the same, 37 Post-Grant oppositions were filed, with 8 of them being disposed.

It is important to note that with the exception of 2017-18, more than 50% of Pre-Grant oppositions have been disposed of. Which implies that it is partially successful, if nothing else.

The idea of a Pre-Grant opposition is essentially on where prior to the grant of patent, one's trade secret is published, and therefore, it no longer remains a trade secret. Now, however, if the grant of patent did not occur, then the trade secret is in the public domain, free for anyone to use. We must analyse and see as to whether or not Pre-Grant opposition is actually worth it.

Let us first look at the data available in the year 2021-22.

66,440 applications were filed, 30,073 were granted, and 35,990 were disposed of. Out of all these applications, only 481 Pre-Grant oppositions were filed, which is less than 1% (0.7) of the number of applications filed. When we take into consideration the fact that 50% of those oppositions were disposed of, it leaves us with 0.5% from the total number that were entertained. It is important to ask as to whether for 0.5% of the applications filed, it is necessary to disclose one's trade secret prior to the publishing of one's patent.

This is especially considering that there are barely any Post-Grant oppositions that have been filed, a grand total of the last five years (From 2017-2022) amounting to 111 (Not including 2019-20's data) out of which 41 were disposed of, which is about 36%. Overall, these are very small numbers in comparison to the number of applications filed, granted and disposed of. If the number of Pre-Grant oppositions were somewhat similar to the number of dismissals, then the Pre-Grant system would make sense, but the number is nowhere close. However, the cost is a rather high one considering that the 35990 patents that were rejected in the year of 2021-2022, and the preceding years are now no longer trade secrets. Even if the number of Post-Grant oppositions did increase to the number of Pre-Grant oppositions, it would barely make a difference in comparison to the number that are granted/disposed of.

The above findings effectively go on to showcase that the Indian Patent office is equipped enough to manoeuvre a Post-Grant Opposition (only) system considering that a majority of applications are decided on its own without the help of Pre-Grant oppositions.

India ought to move towards a Post-Grant opposition system and join the Patent Law Treaty since the author believes that India is equipped enough to handle a Post-Grant opposition system. The author states the above due to the findings in the preceding chapter with regard to the number of Pre and Post-Grant oppositions filed, and the grants and disposals of patents.

There are two major benefits of switching to a Post-Grant opposition system. Firstly, it incentivises individuals to file more patent applications, being assured that their trade secrets would not be revealed unless and until the patent is granted, thereby allowing more products and processes to eventually enter into the public domain. Secondly, if India were to switch to a Post-Grant opposition system, then individuals whose applications have been rejected, still have their trade secret to bank on, and there is no loss in terms of their business. Within the current situation, there is a win-lose outcome, as opposed to a status quo-win outcome. This would serve as being beneficial for everyone. The government would have more patent applications, and business owners can retain their trade secrets if they do not become patents.

1. World Intellectual Property Organisation, Patents. ↑

2. World Intellectual Property Organisation, Trade Secrets. ↑

3. World Intellectual Property Organisation, Opposition Systems. ↑

4. Ibid ↑

5. This data is limited in nature considering that the number of pending cases are not appropriately recorded and the researcher has not been able to find any reliable source that mentions the number of pending applications that are currently existing. However, the lack of data does not affect the point the researcher is attempting to make. At best, it is negligible in nature. ↑

6. Annual report 2021-2022 for IP, Ministry of Commerce and Industry. The latest report, that is 2022-2023 has not been used as the required data has not been made available. ↑

   Views Are Personal.