Assignment of Liability

Yes, through novation. Novation transfers the rights, benefits and obligations of the original contract to the new party. In Wharton’s Law Lexicon[1], the meaning of the term ‘Novation’ is stated as “the substitution, with the creditor’s consent, of a new debtor for an old one.” With Assignment only the rights and benefits transfer, the burden (obligations) remains with the original party, and the original party remains liable.  As compared with assignment, a novation provides a clean break between the original party and a new party.

The reason for a novation occurs when the terms of a contract are still current and the parties want the contractual obligations to continue, but one party, the Transferor, wants to be released from it and allow a third party to take its place, and the other party to the original contract agrees.

Section 62 of The Indian Contract Act, 1872 sets out the general parameters for novation. Effect of novation, rescission and alteration of contract – If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed.

Illustration (a) A owes money to B under a contract. It is agreed between A, B and C that B shall thenceforth accept C as his debtor, instead of A. The old debt of A to B is at an end, and a new debt from C to B has been contracted.
(b) A owes B 10,000 rupees. A enters into an agreement with B, and gives B a mortgage of his (A’s), estate for 5,000 rupees in place of the debt of 10,000 rupees. This is a new contract and extinguishes the old. 

(c) A owes B 1,000 rupees under a contract, B owes C 1,000 rupees, B orders A to credit C with 1,000 rupees in his books, but C does not assent to the agreement. B still owes C 1,000 rupees, and no new contract has been entered into.

It is to be noted that Section 62 speaks of substitution of a new debtor, creditor, contract, etc. in place of an old one. The essential feature of novation of contract is that when a contract is substituted the rights under the original contract are relinquished or replaced by the new contract.

In every novation there are Four Essential Requisites[2]:
(1) A previous valid obligation; 
(2) the agreement of all the parties to the new contract; 
(3) the extinguishment of old contract; and 
(4) the validity of the new one.

Pollock and Mulla, 12^th Edn., pg 1212 to 1215: The parties to a contract are free to substitute or rescind the entire contract, or to modify, alter, vary or rescind some of its terms. Novation or modification of a contract can take place in the same manner as the conclusion of a contract. If one party proposes a novation, and the other party accepts this proposal in a qualified manner, there is no novation. A novation, modification or revocation of the contract cannot be effected unilaterally by one party, it requires the consent of all. The substituted contract must be a valid and enforceable contract and if by reason of formality, such as registration, the document containing new contract is inadmissible in evidence, the original contract might still be operative. A new contract is substituted for it either between the same parties or between different parties the consideration mutually being the discharge of the old contract. It would occur when the substituted contract should rescind or extinguish the previous contract, such that the terms of the two contracts should be so inconsistent that they cannot stand together or render impossible the performance of the former.

---

[1] 15th Edition, 2009 at p.1174

[2] http://corporatelawcorpus.blogspot.in/2010/03/novation-of-contract.html

Competition Commission of India updates M&A Regulations-2012

Competition Commission of India updates M&A Regulations-2012

“The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 as amended up to 23rd February, 2012”

Shall come into force: 1^st June 2012.

Time period: Commences from date of receipt of notice in Form II. If the requisite details are not available for any of the columns in Form I or Form II, the date on which they may be submitted should be clearly indicated against those columns, by the parties to the combination.

Date of notice: Person who proposes to enter into a combination, within thirty (30) days of approval of merger or any agreement in relation to combination. And No combination shall come into effect until two hundred and ten days (210) have passed from the day on which the notice has been given to the Commission or the Commission has passed orders under section 31, whichever is earlier.

Exception: Categories of combinations mentioned in Schedule I are ordinarily not likely to cause an appreciable adverse effect on competition in India. Notice under sub-section (2) of section 6 of the Act need not normally be filed.

Process of Application: Any enterprise which proposes to enter into a combination shall give notice of such combination to the Commission in accordance with sub-section (2) of section 6 of the Act:

·         Shall ordinarily be filed in Form I as specified in schedule II to these regulations, filled, and verified with proper fees by parties.

Parties May fill Form II where:

(a) the parties to the combination are engaged in production, supply, distribution, storage, sale or trade of similar or identical or substitutable goods or provision of similar or identical or substitutable services and the combined market share of the parties to the combination after such combination is more than fifteen percent (15%) in the relevant market ;

(b) the parties to the combination are engaged at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, storage, sale or trade in goods or provision of services, and their individual or combined market share is more than twenty five percent (25%) in the relevant market.

Filing of details of acquisition under sub-section (5) of section 6 of the Act.-

(1) The details of acquisition by a public financial institution, foreign institutional investor, bank or venture capital fund, pursuant to any covenant of a loan or investment agreement, shall be filed without any fee in Form III, along with a certified copy of the loan agreement or investment agreement.

The duly filled in and verified Form III, along with two copies and electronic version shall be delivered to the Commission at the address published on its official website.

Failure to file notice.-

Where the parties to a combination fail to file notice Commission may upon its own knowledge or information relating to such combination, inquire into whether such a combination has caused or is likely to cause an appreciable adverse effect on competition within India.

Where the Commission decides to commence an inquiry, the Commission, without prejudice to any penalty which may be imposed or any prosecution which may be initiated under this Act, shall direct the parties to the combination to file notice in Form II. The notice, referred to in sub-regulation (2), shall be filed, within 30 days of receipt of communication from the Commission, by the parties to the combination.

In case of a merger or an amalgamation, parties to the combination shall jointly file the notice in Form I or Form II.

Fees:

Where the notice is filed in Form I, the fee payable shall be rupees ten lakhs (Rs. 10, 00,000)

Where the notice is filed in Form II, the fee payable shall be rupees forty lakhs (Rs. 40,00,000) only.

Procedure:

Notice (Form I or Form II)

A summary of the combination, not containing any confidential information, in not less than 2000 words: having

1. The values of assets/turnover

2. The respective markets in which the parties to the combination operate

3. Details of agreement(s)/other documents and the board resolution 

4. The nature and purpose of the combination

5. The likely impact of the combination on the state of the competition in the relevant market(s) in which the parties to the combination operate along with 9 copis and electronic version.

Prima facie opinion on the combination:

The Commission shall form its prima facie opinion under sub-section (1) of section 29 of the Act, on the notice filed in Form I or Form II, as the case may be, as to whether the combination is likely to cause or has caused an appreciable adverse effect on competition within the relevant market in India, within thirty days of receipt of the said notice.

                                  “Combination: Section 5 of Competition Act 2002”

The acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises shall be a combination of such enterprises and persons or enterprises, if—

(a) Any acquisition where—

(i) the parties to the acquisition, being the acquirer and the enterprise, whose control, shares, voting rights or assets have been acquired or are being acquired jointly have,—

     (A) Either, in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees three thousand crores; or

    (B) in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars, including at least rupees five hundred crores in India, or turnover more than fifteen hundred million US dollars, including at least rupees fifteen hundred crores in India; or]

(ii) the group, to which the enterprise whose control, shares, assets or voting rights have been acquired or are being acquired, would belong after the acquisition, jointly have or would jointly have,—

    (A) Either in India, the assets of the value of more than rupees four thousand crores or turnover more than rupees twelve thousand crores; or

    (B) In India or outside India, in aggregate, the assets of the value of more than two billion US dollars, including at least rupees five hundred crores in India, or turnover more than six billion US dollars, including at least rupees fifteen hundred crores in India; or]

(b) Acquiring of control by a person over an enterprise when such person has already direct or indirect control over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods or provision of a similar or identical or substitutable service, if—

(i) the enterprise over which control has been acquired along with the enterprise over which the acquirer already has direct or indirect control jointly have,—

(A) Either in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees three thousand crores; or

(B) In India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars, including at least rupees five hundred crores in India, or turnover more than fifteen hundred million US dollars, including at least rupees fifteen hundred crores in India; or]

(ii) The group, to which enterprise whose control has been acquired, or is being acquired, would belong after the acquisition, jointly have or would jointly have,—

(A) Either in India, the assets of the value of more than rupees four thousand crores or turnover more than rupees twelve thousand crores; or

(B) In India or outside India, in aggregate, the assets of the value of more than two billion US dollars, including at least rupees five hundred crores in India, or turnover more than six billion US dollars, including at least rupees fifteen hundred crores in India; or]

(b) Acquiring of control by a person over an enterprise when such person has already direct or indirect control over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods or provision of a similar or identical or substitutable service, if—

(i) The enterprise over which control has been acquired along with the enterprise over which the acquirer already has direct or indirect control jointly have,—

(A) Either in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees three thousand crores; or

(B) In India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars, including at least rupees five hundred crores in India, or turnover more than fifteen hundred million US dollars, including at least rupees fifteen hundred crores in India; or]

(ii) The group, to which enterprise whose control has been acquired, or is being acquired, would belong after the acquisition, jointly have or would jointly have,—

(A) Either in India, the assets of the value of more than rupees four thousand crores or turnover more than rupees twelve thousand crores; or

(B) in India or outside India, in aggregate, the assets of the value of more than two billion US dollars, including at least rupees five hundred crores in India, or turnover more than six billion US dollars, including at least rupees fifteen hundred crores in India; or]

(c) any merger or amalgamation in which—

(i) the enterprise remaining after merger or the enterprise created as a result of the amalgamation, as the case may be, have,—

      (A) Either in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees three thousand crores; or

(B) In India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars, including at least rupees five hundred crores in India, or turnover more than fifteen hundred million US dollars, including at least rupees fifteen hundred crores in India; or]

(ii) The group, to which the enterprise remaining after the merger or the enterprise created as a result of the amalgamation, would belong after the merger or the amalgamation, as the case may be, have or would have,—

(A) either in India, the assets of the value of more than rupees four-thousand crores or turnover more than rupees twelve thousand crores; or

(B) in India or outside India, in aggregate, the assets of the value of more than two billion US dollars, including at least rupees five hundred crores in India, or turnover more than six billion US dollars, including at least rupees fifteen hundred crores in India;]

Explanation.— For the purposes of this section,—

(a) "Control" includes controlling the affairs or management by—

(i) One or more enterprises, either jointly or singly, over another enterprise or group;

(ii) One or more groups, either jointly or singly, over another group or enterprise;

(b) "Group" means two or more enterprises which, directly or indirectly, are in a position to —

(i) Exercise twenty-six per cent. or more of the voting rights in the other enterprise; or

(ii) Appoint more than fifty per cent. of the members of the board of directors in the other enterprise; or

(iii) Control the management or affairs of the other enterprise;

(c) The value of assets shall be determined by taking the book value of the assets as shown, in the audited books of account of the enterprise, in the financial year immediately preceding the financial year in which the date of proposed merger falls, as reduced by any depreciation, and the value of assets shall include the brand value, value of goodwill, or value of copyright, patent, permitted use, collective mark, registered proprietor, registered trade mark, registered user, homonymous geographical indication, geographical indications, design or layout design or similar other commercial rights, if any, referred to in sub-section (5) of section 3.

Modes of amending the constitution 

Power to amend the constitution of India is given in Article 368. Parliament in exercise of its constituent power, amend by way of addition, variation or repeal any provision of the constitution.  For the purpose of amendment, the various Articles of the Constitution are divided into three categories. The first category is out of the purview of Article 368 whereas the other two are a part and parcel of the said Article. The various categories of amendment to the Constitution can be summarized as follows:

Amendment by Simple Majority:

As the name suggests, an article can be amended in the same way by the Parliament as an ordinary law is passed which requires simple majority. The amendment contemplated under Articles 5-11 (Citizenship), 169 (Abolition or creation of Legislative Councils in States) and 239-A (Creation of local Legislatures or Council of Ministers or both fir certain Union Territories) of the Indian Constitution can be made by simple majority. These Articles are specifically excluded from the purview of the procedure prescribed under Article 368.

Amendment by Special Majority :

Articles which can be amended by special majority are laid down in Article 368. All amendments, except those referred to above come within this category and must be affected by a majority of total membership of each House of Parliament as well as 2/3rd of the members present and voting.

Amendment by Special Majority and Ratification by States:

Amendment to certain Articles requires special majority as well as ratification by states. Proviso to Article 368 lays down the said rule. Ratification by states means that there has to be a resolution to that effect by one-half of the state legislatures. These articles include Article 54 (Election of President), 55 (Manner of election of President), 73 (Extent of executive power of the Union), 162 (Extent of executive power of State), 124-147 (The Union Judiciary), 214-231 (The High Courts in the States), 241 (High Courts for Union Territories), 245-255 (Distribution of Legislative powers) and Article 368 (power of the Parliament to amend the Constitution and procedure therefore) itself. Any list of seventh schedule or representation of states in Parliament as mentioned in the fourth schedule is also included.

Ramlila Maidan Decision

Re- Ramlila Maidan Incident

The recent decision of the Supreme Court related to the beating of people who were sleeping in Ramlila Maidan has again put the government in an embarrassing position.Apart from the factual background I will discuss about the reasons given by the court for its pronouncement. It is a long judgment running in 81 pages. The judgment was written by Justice Swatanter Kumar and Justicce B.S. Chauhan also wrote a separate opinion where he agreed with Justice Kumar but added few more things.

Brief facts relevant for our discussion are as follows. On night of 4^th/5^th June 2011, the Police tried to evacuate the people at Ramlila Maidan at 1:30 AM in the night. The people were gathered to attend the yoga shivir of famous Baba Ramdev. MCD had given permission to use the ground for yoga camp. Baba Ramdev then on 4^th June urged all of his follower to join the satyagrah. Sec. 144 Cr.P.C. was imposed at 10.30 PM on 4^th June. Police went to serve the orer on Baba but he was sleeping. Then when he came to know about it he asked his followers to remain calm and gave speech saying that he will leave only in the morning if his followers ask him to do so. Amid this confusion, he asked his followers to form a circle around him. Police used water cannons and tear gas to disperse the crowd. (Although Police before the Supreme Court never accepted the fact that they resorted to lathi charge but the CCTV footages spoke otherwise.) Then brick batting started between police and followers of Baba Ramdev which resulted in many people getting wounded and death of one person. The Supreme Court took suo motu cognizance of the case and issued notices to the concerned parties. The major issues were the facts and circumstances which led to the mishap, who is responsible and what were the consequences and directions to be given.

The Judgment. To begin with, I think this case was not suitable to be taken in the nature of a writ petition. There is a huge confusion as to the facts of the case. The Court itself does not seem to be clear as to what happened in reality. When there are so many parties to the petition, each with its own version of scene then the appreciation of evidence becomes very important before pronouncing the law and fixing the liability. In the case, the Court also decides on the question of contributory negligence on part of Baba Ramdev and other members of his trust.

Let us look at the ways in which the issue at hand can be resolved. One way is to see the statutes which give powers to the police and then check if the exercise of power was proper or not. Another way is to jump on the constitutional issue of seeing whether any fundamental right of the people who were there in the ground was infringed or not. It is well settled principle of constitutional law adjudication that in matters involving the Constitution, court should approach the problem narrowly and its decision also must be as far as possible must concentrate only on the facts before it.

In the present case, however, the Court is not clear in its response. It first starts with the freedom of speech in the US Constitution, then comes to the relevant provisions of India. Then the court discusses the nature of rights and limitations. Then the facts are discussed. Then the Court comes to the law relating to Sec. 144 of CrPC. Facts are revisited once more. In this way the consistency of judgment writing is disturbed on multiple occasions. Sec. 144 of CrPC gives an important tool to the executive authorities to deal with the urgent situation which “tends to prevent, obstruction, annoyance of injury to any person lawfully employed, or danger to human life, health or safety, or a disturbance of the public tranquility, or a riot, or an at-fray.” The Supreme Court in the present case and previously also has held that the urgent nature of situation is a sine qua non for exercising powers under the section. The threat perception under sec 144 must be real and not illusory. Another important point is that there should be given a reasonable notice to the public before imposing a sec. 144 order. Reasonable time should be given to the public to leave the place where order is being imposed. According to the Delhi Police Standing Order 309 “there should be display of banner indicating promulgation of Section 144 Cr.P.C., repeated use of Public Address system by a responsible officer-appealing/advising the leaders and demonstrators to remain peaceful and come forward for memorandum, their deputation etc. or court arrest peacefully and requires such announcement to be videographed.”(para 140 of judgment).

It was contended by the parties that the Sec. 144 order suffered from alafides as the intention of the government was to punish the people raising the voice against it. Court rejected it saying that there is no evidence on the record to prove the allegation. Court held that an order which is arbitrary or illegal may not be necessarily a malafide order. Court held that the order of imposition of sec. 144 in this case was wrong as there was no real threat that was posed before the local authorities in maintaining public order and tranquility. There are other pronouncements also in the case which I will discuss in a shortwhile.

The part of judgment which I think is most important from constitutional law point of view is the emphasis of court on the Part IVA of the Constitution i.e. Fundamental duties of citizens of India. It was inserted in 1976 through 42^nd Amendment to the Constitution.

In Para 20 of the judgment ,

“Thus, a common thread runs through Parts III, IV and IVA of the Constitution of India. One Part enumerates the fundamental rights, the second declares the fundamental principles of governance and the third lays down the fundamental duties of the citizens. While interpreting any of these provisions, it shall always be advisable to examine the scope and impact of such interpretation on all the three constitutional aspects emerging from these parts.”

Para 21 of the judgment says

“As difficult as it is to anticipate the right to any freedom or liberty without any reasonable restriction, equally difficult it is to imagine the existence of a right not coupled with a duty. The duty may be a direct or indirect consequence of a fair assertion of the right. Part III of the Constitution of India although confers rights, still duties and restrictions are inherent thereunder. These rights are basic in nature and are recognized and guaranteed as natural rights, inherent in the status of a citizen of a free country, but are not absolute in nature and uncontrolled in operation.”

Para 32 of the judgment runs as follows

“There has to be a balance and proportionality between the right and restriction on the one hand, and the right and duty, on the other. It will create an imbalance, if undue or disproportionate emphasis is placed upon the right of a citizen without considering the significance of the duty. The true source of right is duty. When the courts are called upon to examine the reasonableness of a legislative restriction on exercise of a freedom, the fundamental duties enunciated under Article 51A are of relevant consideration. Article 51A requires an individual to abide by the law, to safeguard public property and to abjure violence. It also requires the individual to uphold and protect the sovereignty, unity and integrity of the country.”

In the above paragraphs, Court has emphasized the importance of the fundamental duties of the citizen. But I think the Court is not entirely correct in its exposition. The fundamental duties under Part IVA do not create legally enforceable duties because no legal consequence will follow from the breach of such duties. True, if any act is done which violates a duty and contravenes any other statute then the action will lie in that statute, not under the constitution. Court says that while examining the limitations, the duties of the citizens must also be looked into. But it does not cite any instance or example to show how it will be done. For example, suppose a person has gives a speech in public and is arrested by the police under any Act then how would Part IVA of the Constitution will be employed in checking the vires of the Act. Should the Court examine whether the person fulfilled his duty before exercise of the right? Or should the observance of duties under Part IVA be a pre condition for exercising any fundamental right?

Court says that “true source of any right is duty”. It is correct. But that duty is not the duty placed upon the individual especially in the claims involving fundamental rights. If I have a fundamental right then State has a duty to protect it. It is this “duty” which can be a source of a fundamental right. If I accept the rationale of the court for a moment then the obvious question that arises is what the source of the rights was before 1973, when Part IVA was inserted. Another important point is that if we employ more and more provisions of the Constitution to impose the limitations, then the scope of Fundamental Rights will decrease.

If the intention of the Court behind explaining the importance of the duty was to emphasize the fact that the people and Baba at Ramleela Maidan have not acted properly when they refused to comply with the orders of the police, then the Court might have dealt with it by only citing the provisions of IPC which make it an offence to obstruct a police officer from doing his duty.(Court indeed cite the provision in the later part of the judgment) The emphasis on fundamental duties was unwarranted in this case.

The Court finally find the Police responsible for what happened at Ramlila Maidan and attributed some fault to Baba Ramdev also. In para 234, Court says as follows:

“The action demonstrated the might of the State and was an assault on the very basic democratic values enshrined in our Constitution. Except in cases of emergency or the situation unexceptionably demanding so, reasonable notice/time for execution of the order or compliance with the directions issued in the order itself or in furtherance thereto is the pre-requisite. It was primarily an error of performance of duty both by the police and respondent No.4 but the ultimate sufferer was the public at large.”

Court gave a warning to the police to not to engage in such activities in future. The compensation was ordered to be paid. The family of the person who died was given Rs. 5 Lakh, for persons who suffered major injuries, the compensation was fixed at Rs. 50,000 each and persons who suffered simple injuries were awarded Rs. 25,000 each. Twenty-five percent of the amount of compensation was ordered to be paid by the trust of Baba Ramdev.

Right to Sleep: Justice B.S. Chauhan in his opinion wrote that when police disturbed the crowd in night at 1:00 AM their right to sleep was violated. He holds that right to sleep forms an essential part of Article 21 which guarantees personal liberty and life to all. Sleep forms an essential part of living a peaceful life, hence it is a fundamental right.

I think the Court has said something which was unnecessary. The question in the case needed no pronouncement as to whether right to sleep is a fundamental right. Unnecessary formulations of new rights increase more problems than they solve. As recognised in international law that the state has an obligation to respect, protect and fulfill the rights of its citizens. Now place the right to sleep in this framework. What possibly should a state do if a person is deprived of his sleep. For the exercise of this right state must ensure resources like places in the cities where one can sleep peacefully if he has no shelter. If any state authority disturbs a person at night without any good cause then such actions can be dealt by our right to privacy jurisprudence. What about the cases where a construction by the state is going on a busy highway in night. The result would be that whenever any case involving right to sleep will reach the courts, it will add uncertainty to our Article 21 jurisprudence. We must understand that as against a legislative statement of right, the rights deduced by the Courts lack the limitations and enforcement mechanisms which are necessary for smooth exercise of both state’s and individual’s interests.

Mayo Collaboraive_ Elaboration on Thoughts

The mayo collaborative arguments in the Supreme Court of USA raised some interesting questions in the domain of patent-eligible subject matters. The most important is about the test that distinguishes the Patentable subject matter from the idea or the natural phenomenon. What adds to the nature to make patent eligible subject matter?

Lets try to find out the possible solution of this question and suggestions are welcomed.

The ideas to the extent that they are law of nature or well established principles are not patentable subject matter. So Newton Laws, Mass energy equation and thermodynamic principle are not patentable. However, the application of law of nature is patentable. So a bicycle if is novel and has inventive step and has an utility, based on the principle of Newton Laws of Motion is patentable subject matter.

The question to ponder is when the application of law of nature itself would become the law of nature. Where is the thin line difference and what test to apply.

Human intervention is important parameter that is applied in the arguments of Mayo Collaborative case. In my opinion this test holds good for the most of example. If there is human intervention in the law of nature to make something useful, the matter, prima facie should be patentable.

The other question is what should be patentable, the subject matter as such, or the result obtained by the subject matter. Does the patent on the subject matter extends to the results obtained as well. My answer to this question would be NO. So, whereas the bicycle is patentable in the example given above, the motion obtained from the bicycle is not. If similar motion can be obtained by some other means, like skating board, the board will be patentable subject matter, not the motion itself.

Can the result measurement be patentable? Answer is again, in my view, is NO. There can be no patent on the measurement, as the measurement is merely abstract numbers or the tool to measure. Means to measure the number can be patentable, but not the measurement itself.

In the analogy that Supreme Court has taken various time, for the mass energy equation, the equation itself or the energy obtained through the process regulated by the equation is not patentable, however, If there is some means by which energy can be obtained for useful use, that means is patentable.

In the Mayo Case, the patent claim on range seems to defeat the criteria of subject patentability for two reasons.

1. That they are merely measurements

2. That the opinion based on the measurements are mere opinions.

However, if the defendants could prove that the numbers itself is consequence of calibration (Please note that argument like the calibration is itself a ‘mean’ can’t be ruled out) and not mere measurements obtained as such, the Court might end up with serious thoughts on the defendant arguments.

As far as it goes, looks interesting case in days to come.

What Added To Nature Would Make The Subject Matter Patentable (Mayo Collaborative vs Prometheus)

This case could be one landmark decisions on the matter of patentability of subject matter. The case involves the Patent of Prometheus which involves the claim on the “numbers” that it reflects on the dosage of thiopurines. There are suggestions or indicator to the suggested numbers. Following question of law is involved
1. Can numbers be patented (which are reflected out of theuropeutic process).
2. What is the test for the patentability involving the natural phenomenon? When the subject matter turns patentable and doesn’t remain a mere abstraction.
A federal judge invalidated the patents, holding that the patent couldn't cover the body's reaction to drugs and thus the numbers. The U.S. Court of Appeals for the Federal Circuit, which specializes in patent issues, overturned the lower court order.
The questions on the patentability of numbers is defended by the principle of utilty, wherein in particular, on the question of court on invalidity of numbers in the correct range later in time, it was defended that it can be taken care by utility. Thus, if the patentable range of numbers are no more correct at some later point of time, the utility is lost and the Patent defeats.
Other important questions are raised by justice Scalia and Justice Kennedy in the case. The arguments are worth reading.
I am sure, I am going to put some views on this hugely and tempting topic sooner. The arguments can be heard at oyez.
The arguments were heared on 7th of December, 2011.

Philosophy of Immanuel Kant

In his book “Critique of Pure Reason, (1781)” which is considered as one of the most influential works of philosophy, Immanuel Kant criticized the utilitarian theory. 

Utilitarianism which was first proposed by Jeremy Bentham advocates for rules which gives maximum pleasure to maximum number of people in the society. The basis of this theory is that each act of man is based on or results in either pain or pleasure. Humans have a tendency to work for pleasure and avoid pain. Therefore, the “good” law would be the one that would create maximum pleasure for maximum number of the people. For example, a criminal must be sent to jail because it would give a certain “kind” of pleasure to the society. 

The basis of Kant’s rejection of utilitarianism is that humans are rational beings capable of reasoning. This is what sets them apart from mere inanimate things. Kant advocates that each individual irrespective of his societal status possesses an inherent dignity which has an intrinsic value. Therefore, humans should not used as a means to achieve an end. Kant advocated the libertarian concept of individual freedom. But his conception of freedom is different from others. 

According to Kant, freedom is opposite to necessity. For example, if someone goes to restaurant to eat something then according to Kant’s notion of freedom, he is not ordering food according to his freedom because his hunger is the cause which necessitated him to go to restaurant. To act freely is not to choose a best means for an end. To act freely is to act for the sake of end itself. Accordingly, Kant proposes freedom as autonomy which means to act according to your own will. In autonomy, a Law is not imposed on an individual; rather the individual imposes a Law upon himself.

Kant proposes a very stringent standard of morality. Each act has its own moral worth which should be independently judged from the consequence that it produces. This is against the theory of consequential morality which advocates that the morality of an act depends on the consequence that it produces. Therefore, according to Kant, fundamental rights are not morally good because their observance leads to a ordered and peaceful society rather they are morally good because of the reason that each individual possess an inherent dignity and hence he must possess certain fundamental rights. 

Taking another example, deception is not morally bad because in the long run it may harm, but because in deception, one uses the other person as a means to achieve an end and humans should not be used as a means. Notions like duty, inclination, sympathy and altruism are acceptable reasons behind acts, which give acts their moral worth.

The contribution of Immanuel Kant has been great in the way that he advocated the dignity of each human being. Philosophers like John Rawls were influenced by what came to be known as “Kantianism”. John Rawls in his famous Theory of Justice states that a liberal democracy and its institutions must take care of all the people including the people belonging to the lowest strata of the society. 

His principle of inviolability of each person’s dignity is very similar to the Kant’s theory. Another area which in my view supports Kantian notion is the area of human rights. The theory of human rights developed post World War II emphasizes that human rights are rights which an individual possesses because of the reason that he is human. Here also we see that the intrinsic worth of human dignity is respected.

Please write your comments and suggestions.

( For a lucid account of Kant’s philosophy, see http://www.justiceharvard.org/2011/02/episode-06/#watch)

Pre-Grant opposition: An opposition of a different kind

I was reading section 25(1) of the Patent Act 1970; and i found some confusion in relation to pre-grant opposition. 

Section 25(1) read as :At any time within four months from the date of advertisement of the acceptance of a complete specification under this Act (or within such further period not exceeding one month in the aggregate as the Controller may allow on application made to him in the prescribed manner before the expiry of the four months aforesaid) any person interested may give notice to the Controller of opposition to the grant of the patent  on the grounds:

1.If the invention (in full or part) is wrongly obtained.

2.Claim has been published before priority date claimed.

3.Claim has been claimed in other patent.

4.Claim of the complete specification was publicly known or publicly used in India before the priority date of that claim.

5.Any claim of the complete specification is obvious and clearly does not involve any inventive step.

6.Any claim of the complete specification is not an invention

7.Complete specification does not sufficiently and clearly describe the invention

8.Failed to disclose information required by the controller.

As the Patent act or Patent rules doesn't describe regarding fees and forms of filing pre-grant opposition, it has given rise to few doubts in my mind.

1.As this pre-grant opposition is filed at the application stage, whether the party who is opposing to the application, should be considered as a necessary party as compared to post grant and revocation proceedings? 

As this has been not clearly stated in Act and rules about the pre-grant proceedings, i would like to go with the answer. NO. (the party who is opposing the application is not the necessary party). i,e it is not inter-party in nature of opposition.

Reasons:

1. As this in pre grant stage, revelation of document might cause damage or might hamper the credibility of the patent.If the party is considered as a party to proceedings, then he is entitled to see all the documents in relation to the pertaining application of patent. and if such documents are produced (it might constitute an prior art). 

2. There is no fees and forms prescribed for pre-grant opposition. 

3.Appearing and hearing is not compulsory, though he can provide an application for it, but it is upon the discretion of controller to allow such application.  If it deals with the matter of utmost importance, which if falls

in public domain, might loosen the stand of patent, controller can deny such application.

4. As stated inn section 15 of the Act states that power of controller to revoke and amend an application may be exercised even without a pre grant opposition.

5. The role of opponent is merely to  provide the grounds of opposition and material to support the grounds.

6.If the controller is satisfied with the materials opposing the application,then he can allow pre-grant opposition, on contrary if filed for post-grant or revocation,it is not upon the satisfaction of controller to accept or reject the same.He is bound to take up the application and start the proceedings.

7.In pre-grant opposition, cost is not allowed to the person who oppose the application, on contrary cost is allowed in post grant & revocation proceedings.i,e opponent can proceed with the case irrespective of the merit of notice of opposition. but the case is not same with pre-grant opposition.

8.Patent Act and Rules are silent about whether the defence of the applicant should be disclosed to the opponent.(If not disclosed to the party, as it would amount to violation of natural justice and may invoke writ jurisdiction), (if supplied, would form a prior art and as well as affect application).

Considering the above points, i am with the opinion that pre-grant opposition is not an inter-parte opposition, where the party who is opposing the application is not a necessary party, but he mere acts as an facilitator to oppose the application.This opposition is between Controller and the applicant of the patent.

Readers re free to provide their comments and opinions!!

Difference between Indian & US Patent System

Provision related to the patentable subject matter in US Patent Act is illustrative in nature in the sense that it defines what is patentable in US. While, on the other hand, Indian Patents Act defines what is not patentable subject matter.

US patent act allows a discovery of process, machine, manufacture or composition of matter to be patented if it satisfies the criteria of novelty, utility and non-obviousness. While under Indian Patent Act, the mere discovery of a new and useful process or product is not patentable.

US Patent Act does not speak specifically about patentability of computer programs, while under Indian Patent Act, computer programs per se are not patentable.

Indian patent system works on “first to file” scheme while US works on “first to invent” scheme. Though this has been changed by America Invents Act, 2011. Patents filed after March 16, 2013 will be granted on a first to file basis.

In US only post grant opposition to the patent is allowed while in India both pre grant and post grant opposition are allowed.

US patent laws allow the grant of patent to anyone who invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof. Indian Patent Laws does not allow new and useful process or product by mere discovery to be patented.

Interference proceedings in US Patent system considering the inventor ship issues. No interference proceedings in Indian patent system.

Plant are patentable in us where as plant are not patentable in India.

Business methods are not patentable in India whereas they are patentable in US

Patent agent of other countries (Canadian patent agent) also can practice as US patent agent. But this is not possible in India, where a patent agent must have Indian nationality.
Patent Term adjustment is there in US , while there is no provision for patent erm adjustment in India.

Filing of a patent in affordable cost

Filing of Patent

Filled by Natural person: Rs.1000/- 

If filed by ‘Other than natural person’ may include a legal entity; it may also include a legal entity and a natural person jointly, then: Rs.4000/-

Specification and Claims

Specification up to 30 pages : Free

Specification exceeding 30 pages, for natural person: Rs.100/- per page

Specification exceeding 30 pages, for other person: Rs.400/ per page 

Claims up to 10: Free

Claims exceeding 10, for natural person: Rs.200/- per claim

Claims exceeding 10, for other person: Rs.800/- per claim

Publication

All patent applications filed are published in the Patent Office Journal after 18 months from date of filing .But, there can be a early publication filed in Form 9.

Early publication for Natural person:  Rs.2500/-

Early publication for other person: Rs.10,000/-

Examination

Must be filed within 48 months prior to date of application or from priority date.

The prescribed fees for examination for natural person: Rs. 2,500/- 

The prescribed fees for examination for other person: Rs. 10000/- 

Overall

  Minimum cost to be payed by a natural person for a patent: Rs.6000/-

  Minimum cost to be payed by other person for a patent: Rs.24000/-