To,

Dr. Manmohan Singh,

Prime Minister of India,

7 Race Course Road,

New Delhi – India

Dear Dr. Manmohan Singh,

By way of introduction, SpicyIP is a leading intellectual property (IP) website that has been working towards improving transparency and governance in Indian IP institutions since 2005. Our team comprises academics, consultants and law students, and we were recently included among the top 50 influential IP personalities of the world in 2010-11.

In 2008 we petitioned you to improve transparency and accountability by making patent-related information available through an open access database. We are grateful for the various steps taken in this regard, owing to which a wide variety of patent data is now available for public consumption via the IPO (Indian Patent office) website. Sadly, some of this information remains incorrect and incomplete, but we hope that this will improve in the months to come.

This petition, submitted on behalf of several IP stakeholders, requests an urgent overhaul of the Trademark Registry (the ‘Registry’). The Registry has had a controversial recent past, with the arrest of the Deputy Registrar of Trademarks Ms. Kasturi on corruption charges; the disappearance of thousands of files; and the overall poor quality of trademark examinations. We believe that the root cause of these problems is the appalling lack of staff at the Registry. 

Before detailing our complaints, it is relevant to highlight the importance of an efficient Registry for India. Trademark law originated in the common law tort of ‘passing off’, to prevent confusion between competing and similar products. With codification into law (the 1958 and 1999 Trade Marks Acts), registered owners of trademarks could now exclude others from economic activity that infringed their rights. In trademark law, imposing such restrictions on economic activities of others is a reasonable restriction balancing the greater good of preventing confusion.

 

But when the Registry begins to malfunction, by losing thousands of files, or delaying applications for years, or registering poor trademarks, it effectively violates a host of fundamental rights. For instance, the registration of a ‘bad’ trademark can lead not only to an injunction (and shut down a legitimate business), but also flood courts with multiple lawsuits.

It is true that the Registry’s functioning has marginally improved due to efforts of honest bureaucrats. But as explained below, the malaise is so deep that it will require a gigantic effort by the government, and especially the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, to bring about radical reforms in the workings of the Registry.

 

We outline below the key problems with the Registry, and our suggested solutions: 

In 2011, the DIPP filed an affidavit before the Delhi High Court, stating on oath that the Trademark Registry had lost 44,000 files relating to trademark registrations and oppositions.  Soon after, the Registry released a public notice stating that further stock-taking had ascertained that only 8,000 files were missing, and not 44,000 as originally reported.  For the following reasons we suspect that neither of the above numbers are accurate:

(i) The audit on the missing files was effectively an ‘in-house’ audit, conducted by Registry staff. To expect the Registry to audit its own missing files is problematic, particularly when it already faces numerous allegations of corruption. Also, in response to our application under the Right to Information (RTI) Act, 2005, DIPP revealed that no administrative or criminal proceedings had been initiated against any official in connection with the missing files.

  

(ii) That the Registry could have found time and resources to conduct an audit, is highly unlikely, as it remains severely under-staffed, and struggles to fulfil even basic statutory obligations. 

Our request: 

The Comptroller and Auditor General (CAG) should conduct an independent audit on the number of missing files at the Trademark Registry. Simultaneously, the CAG should also conduct an audit on files at the Patent Office, (where we have reason to believe that there are similar instances of missing files). We believe that only the CAG has the resources and expertise to carry out an audit of this scale.

 

It is relevant to point out here that the IPO is the largest revenue earning department of the government of India. In 2009-2010, the IPO earned revenue of Rs. 215.25 crores for the government . 

 A large number of missing files, besides disrupting the economic activity of private citizens, will also affect the government’s revenue.

A critical problem facing the Registry is the shortage of staff, which appears to be due to gross mismanagement by DIPP in conducting timely recruitment of examiners and registrars. An RTI application regarding vacancies at the Trademark Registry revealed the following for 2010-11.

Out of a sanctioned strength of 122 posts, only 55 have been filled up by DIPP. In other words, over half (55%) of the posts remain vacant. This is not limited to 2010-11: a study of the Registry’s working strength for the past eight years reveals similar results. 

 

Not once in the last eight years has the Registry been staffed at its full-strength. Although efforts seem to have been made recently to fill up vacancies, more than 50% of all posts remain vacant. In its worst year (2009-2010), the Registry was working at a mere 17% strength.

 

To put these numbers in perspective, these vacancies may be examined in context of trademark applications filed with the Registry.  Despite the increasing number of trademark applications, the working strength of the registry has either remained the same or in some cases actually decreased. The crippling shortage of staff in 2009-2010 has created an immense backlog at the Registry. A recent Discussion Paper released by DIPP  says that over 400,000 trademark applications are pending before the Registry, while it has a staff of just 15 Registrars, 3 Senior Examiners and 37 Examiners. The Registry cannot possibly meet this burden even if it works at its full strength. 

The Registry now has another responsibility: under the Trade Marks (Amendment) Act, 2010, implementing the Madrid Protocol, India has to complete the trademark registration process in 18 months.  The 84th Report of the Department Related Parliamentary Standing Committee on Commerce already forewarned of the Registry’s inability to meet this 18-month deadline.   

DIPP must urgently conduct a study on the hours needed to be spent by an Examiner/Registrar on a trademark application. Appointments must be made according to expected trademark filings. Thereafter, DIPP should recruit for the Registry on a very urgent basis.

One part of the long-standing problem of corruption at the Registry lies in its shortage of staff. However, a larger part of the problem appears to be the absence of deterrence from corruption. In March 2011, the Central Bureau of Investigation (CBI) arrested the Deputy Registrar of Trademarks, Ms. Kasturi, on corruption charges and seized from her residence large quantities of currency, gold and evidence of real estate investments. This arrest may only be the tip of the iceberg. Mint (a leading business daily) recently reported that the Controller General of Patents, Trademarks & Designs Mr. P.H. Kurian had himself requested for a CBI probe against certain members of his staff.  However, we are yet to hear the results of such a probe. 

We request government to scrutinize all credible complaints of corruption against officials of the Registry and order the CBI to launch investigations accordingly. We also petition that the CAG be requested to audit the IPO; as well as appoint an independent third party to study the IPO’s functioning and make recommendations to improve their functioning and efficiency. 

Given the pressing importance of these issues we request you to take these up issues with the DIPP on a priority basis and do all else that is needed to restore the public confidence in the Indian intellectual property system. 

Thanking You

SpicyIP team 

Prof. Shamnad Basheer

Sumathi Chandrashekaran

Prashant Reddy T

Shan Kohli

On Behalf of the following signatories: