Patents are indeed crucial intellectual property assets, playing a pivotal role in safeguarding innovations, fostering technological progress, and supporting economic growth. The importance of patents spans multiple dimensions, such as protecting proprietary technologies, enabling commercialization through licensing and royalty agreements, and preventing unauthorized use by competitors. They also provide defense mechanisms against potential legal disputes and offer a competitive edge in industries where innovation is a key differentiator.
However, managing patents requires careful attention, particularly with regard to the administrative processes involved in maintaining their validity. One of the most critical aspects is ensuring that all renewal fees are paid within the prescribed timeframes. Failure to do so can lead to the lapse of a patent, with potentially dire consequences for the patent holder. Once a patent lapses, the invention enters the public domain, allowing anyone to use it freely without fear of infringement.
For example, in the pharmaceutical industry, if a drug molecule's patent lapses due to missed renewal payments, generic drug manufacturers can start producing and selling the same drug without facing legal action. This can significantly erode the patent holder's market exclusivity and revenue. Similarly, startups or entrepreneurs can capitalize on such lapses by acquiring or using the expired patent, allowing them to quickly enter the market with a similar product and gain an early advantage.
The loss of patent rights due to lapses is a reminder of the need for rigorous patent management practices. Companies must stay vigilant with administrative deadlines and renewals to protect their intellectual property and the value derived from their innovations. This is particularly vital in industries with high research and development costs, where the patent is a key asset ensuring return on investment. Therefore, lapses in patent protection not only undermine the competitive position of the patent holder but can also result in a significant loss of economic potential from the innovation.
Reinstating a lapsed patent can indeed unlock significant economic opportunities and offer a range of strategic benefits, particularly for companies looking to reassert their rights over valuable innovations. Reactivating a patent allows the patent holder to regain exclusive rights to the technology or invention, which can open new avenues for revenue generation, partnerships, and licensing opportunities.
Challenges in Reactivating a Lapsed Patent
While the benefits are clear, reactivating a lapsed patent may come with some challenges, including:
- Administrative Costs and Delays: The process of reinstating a lapsed patent often involves administrative procedures, such as proving that the lapse was unintentional and paying any overdue renewal fees along with potential late fees. This can be costly and time-consuming.
- Legal Scrutiny: Competitors or other parties may challenge the reinstatement of a patent, especially if they have already invested in using the technology during the period when the patent was lapsed. It's essential to ensure that the reinstatement process is handled correctly to avoid legal complications.
- Market Dynamics: Even with a reinstated patent, market conditions may have changed, and the technology may face competition from new innovations. Businesses need to assess whether reactivating the patent will still provide a competitive advantage in the current market landscape.
Restoration Remedies in India:
In Indian Jurisdiction, the Indian Patents Act provides a provision for restoration of patent under section 60. The Patentee with the leave of the Controller, within eighteen months from the date on which the patent ceased to have effect, can make an application for the restoration of the patent. The Patentee need to pay the fee of about INR 12000/- The application shall contain a statement, verified in the prescribed manner, fully setting out the circumstances which led to the failure to pay the prescribed fee, and the Controller may require from the applicant such further evidence as he may think necessary.
Premises that are used in India to restore the lapsed patent:
- Agent's negligence: The patentee try to prove that the agent's negligence caused the patent to lapse.
- No contributory negligence: The patentee try to prove that they were not at fault.
- No intent to abandon: The patentee try to prove that they did not intend to abandon the patent.
- Full diligence: The patentee try to prove that they acted with full diligence.
- Harm if patent is lost: The patentee try to prove that they would suffer significant harm if the patent were lost.
Relevant Indian Case Laws:
The case of Rubicon Research Pty Ltd. v. The Controller General of Patents, Designs and Trademarks and Ors presents an important example of the flexibility and considerations involved in the restoration of a patent, especially when strict adherence to deadlines might unfairly disadvantage a patentee. In this case, the Intellectual Property Appellate Board (IPAB) allowed the restoration of a patent beyond the usual 18-month period, based on the circumstances surrounding the patentee's efforts and the agent's negligence.
The Delhi High Court decision in Bry-Air Prokon Sagl & Ors. vs Union of India & Anr is a significant ruling in the context of patent law, particularly regarding the restoration of patents that have lapsed due to the non-payment of renewal fees. The court's ruling addresses the issue of patent agent negligence and emphasizes the importance of a nuanced and flexible approach in such cases.
Restoration remedies in other countries:
In Europe, as per Rule 51(2), if the renewal fee has not been validly paid on or before the due date, it may still be validly paid within six months of the said date, provided that the additional fee is paid within this period. If such deadline is lapsed, a request for re-establishment of rights under Article 122 and Rule 136 shall be filed in writing within two months of the removal of the cause of non-compliance with the period, but at the latest within one year of expiry of the unobserved time limit. The request has to be made with payment of 750 Euro.
In USA, the annual fees for U.S. utility patents are paid in three instalments, which are 3.5 years, 7.5 years, and 11.5 years. USPTO provides a grace period of 6 months after the normal payment period, along with a late fee of 500USD.
After the grace period, the Patentee can still request the reinstate of rights and pay the corresponding fees with "non-negligent reasons" under 37 CFR 1.378 provision of US Patents Act. If the overdue time exceeds two years, it needs to further explain the reasons for the delay and submit the corresponding proof. A petition for the delayed payment of the fee for maintaining a patent in force is required with a fee of 2100USD.
In Japan, a late payment equivalent to double the patent fees can be made if the late payment is paid within six months after the original deadline to pay has expired. Additionally, the Patentee can pay the patent fee and the patent surcharge within two months after the date on which the justifiable reason ceased to exist, as long as this is done within one year after the six- month grace period expired.
In Canada, the Patentee can latest pay the missed payment and is the later of: 6 months after your maintenance fee was originally due, and, 2 months after the date of the Commissioner's notice. The Patentee needs to pay a late fee of 150USD. Further, the Patentee may submit a request no later than 12 months after the end of the six months after the original due date of the maintenance fee with a reinstatement fee of 289USD.
In Australia, SECT 223 of PATENTS ACT 1990 provides provisions related to extension of time and regulation 22.11(3) permits extensions of time for errors or omissions that occurred in the "grace period" for payment of continuation or renewal fees, effectively allowing an extension of the grace period to pay the fee. The extension fee charged is 100 USD /Month.
In South Africa, the renewal fee can be paid within 6 months from the actual deadline of paying renewal fee. Further, the lapsed patent can be restored by a request for restoration (section 47(1)[Reg. 49] with fee of R282 (15USD) and an affidavit.
In Brazil, the renewal fee can be paid within 6 months from the deadline. A request for the restoration can be filed within three months from the date of publication of the shelving in the RPI or from the expiry of the patent. The Annual fee along with the restoration fee need to be paid as per provision of Article 87 of the LPI.
Overall, almost all jurisdictions provide extension of time to pay the renewal fee with surcharge and provide option of restoring the lapsed patent in a stipulated time period.
Conclusion
Reinstating a lapsed patent is indeed far more than a simple procedural formality—it is a strategic exercise with significant legal, economic, and operational implications. The process of restoring a patent goes beyond filling out forms or paying fees; it plays a crucial role in maintaining the value of intellectual property (IP) and safeguarding the competitive advantage of businesses, particularly those heavily dependent on innovation. The restoration helps to regain on or more of the market exclusivity, potential licensing revenue and value of a company's IP portfolio.
The operational and administrative challenges require utmost attention to resolve issues such as data transition, patent transfers between assignees, risk of administrative flaws resulting into loss of deadlines, jurisdictional complexity etc.
Accordingly, a timely monitoring of cases without relying on single platform is highly required for avoiding any future miss outs. Additionally, there is need for a more transparent, harmonized and universal provisions, since the rules and processes for patent restoration vary from country to country. Given the complexities involved in patent restoration, it is clear that a more harmonized approach would benefit both patent holders and the broader innovation ecosystem. Some of the key points for a more uniform framework include: consistency across jurisdictions, streamlining the process, reducing administrative burden, and ensuring global IP protection.
Originally published January 2025
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
