The Tribunals Reforms (Rationalization and Conditions of Service) Bill, 2021- A Systematic Ban on IPAB

March 5, 2021
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IPAB

Introduction

India might be one of the leading countries in the world in terms of the backlog of court cases. Even after some of the best efforts made by the government to improve the situation, it is still like a merry-go-round. One such effort was the system of tribalization which was meant to reduce the burden of courts and provide a speedy redressal to the people. Indeed, some tribunals like National Company Law Tribunal (NCLT) and Consumer Dispute Redressal Commission are helping the cause, tribunals like Intellectual Property Appellate Body (IPAB) are increasing burden on the system. Thus, a constant demand was made to the government by many IP enthusiasts to ban the same.

The same has been addressed by the government through the recent bill presented before the Lok Sabha. This Bill tries to streamline the tribunal system of the country and bring in efficiency in the adjudication of disputes. This article has tried to provide an overview of this bill and its impact on the judicial system.

What is IPAB

Intellectual Property Appellate Body was constituted under the Trade Marks Act, 1999 in 2003. Initially, the body was authorized to adjudicate the appeals against the decision of the registrar of Indian Trademarks Act, 1999 and Geographical Indications of Goods (Registration and Protection) Act, 1999. Moreover, the ambit of its functioning was enhanced to cover the Copyright and Patent issues too. This was set up as a mechanism to shift the burden of High Courts from hearing the IP disputes. It was made compulsory that an appeal must be made within three months from the date of the order made by the controller to the IPAB. However, the body never worked in its full swing due to various administrative reasons like lack of enthusiasm in the appointment of judicial as well as technical members. Thus, instead of achieving the objective behind setting up IPAB i.e., speedy disposal of IP disputes, it was creating an extra burden on the system.

Another reason for creating the IPAB was that it was not always possible for the judges to appreciate the complex technical aspects of IP disputes coming before them. So, the government envisioned that the adjudication of disputes could be done by the experts of the IP field itself. However, the government always struggled to find competent technical members for IPAB considering the requisite experience required to occupy the post. This issue was even brought before the Delhi High Court in the case of Mylan Laboratories v. Union of India & Ors., where the court observed that the adjudication of IP disputes is getting severely affected due to the vacancy of the technical member in the tribunal.

A basic assumption behind setting up an Appellate Tribunal is that an appeal from the lower tribunals or district courts will surpass the jurisdiction of the High Court and the same will be adjudicated by the Appellate Tribunal. An appeal from there will lie directly before the Supreme Court. However, it was not the case with IPAB as an appeal from here goes to the High Court instead of the Supreme Court, creating an extra hierarchy in the adjudication of disputes. Thus, the existence of IPAB always remained question and finally the same has been completely banned by the recent bill present before the Lower House of the Parliament.

Overview of the Draft Bill

The financial budget of 2021 has drastically affected the status of the tribunals and appellate bodies in the country. In the wake of the same, on February 11, 2021, the Minister of State Finance Mr. Anurag Thakur tabled a bill in the Lok Sabha titled, “The Tribunals Reforms (Rationalisation and Conditions of Service) Bill, 2021”. This bill seeks to bring in some drastic reforms in the tribunal structure of the country. The bill scrap down the following appellate tribunals-

“Film Certification Appellate Tribunal” under the “Cinematograph Act, 1952”.
“Airport Appellate Tribunal” under the “Airport Authority of India Act, 1994”.
“Intellectual Property Appellate Board” under the “Trade Marks Act, 1999”.
“Plant Varieties Protection Appellate Tribunal” under the “Protection of Plant Varieties and Farmers` Right Act, 2001”, and
Appellate Authorities under “Customs Act, 1962”, “Patents Act, 1970”, “Geographical Indications of Goods (Registration and Protection) Act, 1999”, and “Control of National Highways (Land and Traffic) Act, 2002.”

Also, the bill reduces the tenure of the chairperson and members of the tribunal from five years to four years of the following tribunals-

National Consumer Dispute Redressal Commission.
Securities Appellate Tribunal, Debt Recovery Tribunal, and the Debt Recovery Appellate Tribunal.
National Company Law Appellate Tribunal.
Income Tax Appellate Tribunal, Customs Excise and Service Tax Appellate Tribunal.

Impact on IP disputes

The bill will drastically affect the adjudicating mechanism of IP disputes. It has tried to amend four major IP legislations i.e., Copyright Act, 1957, Patents Act, 1970, Trade Marks Act, 1999, and Geographical Indications of Goods (Registration and Protection) Act, 1999. If the bill will get a nod from both the houses, it will again transfer all the pending cases filed under these Acts before the IPAB to either the High Court or the Commercial Division of the High Court.

This ban will help the government to reduce the cost of infrastructure as well as other expenses which was incurred due to the operation of IPAB. The primary benefit of the tribunal system was that it was not obliged to follow the procedural laws. However, this bill will again push the people into the complex web of procedural dispute adjudication.

Impact of the Bill

While presenting this bill before the Lok Sabha, it was told by Mr. Anurag Thakur that this step will ensure speedy disposal of dispute and reduce the unwanted expenditure incurred by the government. However, it is interesting to note that the same reasons were cited while bringing the regime of tribalization to the country. Thus, it shows a clear contradiction in the implementation policy of the government.

This is not the first time that the tribunals in India are being banned by the government. The process of streamlining the tribunals started in 2015 and with Finance Act, 2017, the number of tribunals was reduced from 26 to only 19. Even the Supreme Court in various cases like L. Chandra Kumar v. Union of India and Roger Mathew v. South Indian Bank Ltd. has criticized the system of tribunalisation and the aspect of sending appeal directly from the tribunal to the Supreme Court. The court in these cases observed that the tribunals cannot suppress the jurisdiction of the High Court and for this reason, an appeal from IPAB was made to the High Court. Thus, the existence of tribunals like IPAB where the maximum litigants are not the general public was acting as an impediment against the speedy disposal of cases. However, it is still not sure that bringing these cases before the High Courts will improve the situation.

Currently, there are more than four crores pending cases before the various courts of the country starting from the Supreme Court to the subordinate courts and one of the major impacts of the Bill on the Indian Judicial System will be that the cases which were pending before these tribunals will again get transferred to High Courts. Thus, the bill will cause a sudden spike in the number of pending cases before the courts.

Furthermore, the bill has also tried to went against the ruling of the Supreme Court, wherein the case of Madras Bar Association v. Union of India, it observed that the minimum term of appointment will be for five years. However, the proposed bill has tried to amend the Finance Act, 2017 where the term of appointment will again be reduced to four years both for the chairperson as well as the members of the tribunal. Also, the step of banning might directly affect the employment of the members and staff of the tribunals. Thus, on one hand, this bill will reduce the unwanted monetary burden on the government, while on the other hand there will be an increase in the number of pending cases before the judiciary.

Conclusion

As the current government is in the absolute majority, this bill will not face any difficulty in attaining the status of an Act in the upcoming days. The result of banning IPAB will be that people will again have to struggle with the procedural laws of the courts and the dispute between the parties will have longer life expediency due to the trend of adjournments in the courts. Also, as there will be no technical members in the court during the adjudication of the IP disputes, the role of expert opinion will become very important.

To sum up the whole discussion, it can be said that banning IPAB is the right step taken by the government as it was acting as an impediment against the disposal of IP dispute. However, it will be interesting to see how the judiciary will coup up with the increase in the backlog of cases.

Author: Yash Mehta, a 4th Year B.A. LLB student (7th semester) at National Law University (Nagpur), an intern at IIPRD. In case of any queries please contact/write back to us at [email protected].