Natural justice redefined and reinforced in key 2022 decisions against the Patent Office

The abolishment of the Intellectual Property Appellate Board in 2021 sparked doubts about whether India’s high courts could handle the enormous backlog of appeals filed in respect of IP matters over the years. However, the Delhi High Court continues to prove its ability to stand strong as it issues expeditious decisions on a range of IP matters.

This article is the second instalment in a three-part series revisiting important judicial decisions on patent law from 2022 (see "Critical 2022 high court decisions shaping the Indian prosecution landscape”).

Wins for natural justice

In Agriboard International LLC v Deputy Controller of Patents and Designs (CA (COMM IPD-PAT) 4/2022), the Delhi High Court set aside a refusal order passed by the Indian Patent Office (IPO) and held that rejecting an application for lack of inventiveness without sufficient analysis goes against natural justice.

The application was filed at the IPO in 2019 for an invention for the “efficient method and apparatus for producing compressed structural fiberboard”. After examination, it was rejected because of the lack of an inventive step in view of one of the cited references. The refusal order was devoid of any reasoning and merely reproduced the abstract of said cited reference.

The invention’s technical aspects were highlighted before the court and it was submitted that it uses an electrically driven extruder. However, the cited reference refers to a mechanically driven extruder – the patent office trivialised such alteration without any reasoning. The IPO’s position was that the difference between an electrically driven extruder and a mechanically driven extruder was a mere workshop modification. The high court observed that the application achieved a significant increase in efficiency and that if the IPO disagreed, it must analyse the scope of existing knowledge, and how a person of ordinary skill in the art would move from such existing knowledge to the invention. Lacking such analysis, the refusal order was unacceptable. Accordingly, the rejection was set aside by the court (decision dated 31 March 2022) and the matter was remanded back to the IPO for fresh consideration.

The court has also emphasised the principles of natural justice in a slew of later cases. On 7 July 2022, the Delhi High Court partially allowed a writ petition in Best Agrolife Limited v Deputy Controller of Patents & Anr (WP(C)-IPD 11/2022 & CM 32/2022, 54/2022, 55/2022). The petitioner sought the quashing of an order passed by the IPO, in which a pre-grant opposition filed by the petitioner was dismissed and a patent was granted in favour of the applicant.

The pre-grant opposition cited lack of novelty and non-patentability under Section 3(d) against an application related to the “synergistic suspo-emulsion formulation of Pyriproxyfen and Diafenthiuron”. It was dismissed via a summary order and the IPO granted the patent. On appeal, the petitioner contended that aside from non-consideration of opposition grounds, the IPO also took additional documents and evidence filed by the applicant into account as well as allowed claim amendments, all without notifying the petitioner.

The court observed that the IPO should have examined: “whether the data and other factors brought forth by the Applicant had the effect of enhancement of efficacy from a known substance, which is the legislative intent of amendment of Section 3(d).”

Further, non-consideration of prior arts cited by the petitioner without any reasoning breaches natural justice principles. However, the contention raised with regard to amendments being allowed were referred to as untenable by the court in view of its trivial nature.

The matter was, therefore, remanded back to the IPO for reconsideration of the pre-grant opposition under the grounds of Section 3(d) – lack of novelty and inventiveness – in view of the petitioner’s documents.

In Otsuka Pharmaceutical v Controller of Patents (CA (COMM IPD-PAT) 2/2022), the Delhi High Court reprimanded the IPO for justifying the refusal of a patent grant on the basis of prior art documents that had not been cited during the oral hearing proceedings. Relying on a notification issued by the controller general of patents, the court held that the applicant must be informed of any objection related to prior art before the hearing date. It reiterated the guidelines laid down in Agriboard International LLC for assessing inventiveness and held that: “if the Patent Office had consciously chosen to raise objections only citing D1 and D4 as prior art documents, it was not open to the respondent to rely on D2 and D3 while finally adjudicating the patent application.”

The matter was accordingly remanded for fresh adjudication.

Similarly, in Auckland Uniservices Limited v Controller of Patents (CA (COMM IPD-PAT) 8/2022 & IA 296/2022), the Delhi High Court held that refusing a patent grant on the grounds of novelty and inventiveness without providing a reasoned order is contrary to settled law and would again violate principles of natural justice.

It is vital to note here that in January 2023, in Perkinelmer Health Sciences Inc and Ors v Controller of Patents (CA (COMM.IPD-PAT) 311/2022), the court referred to the above Otsuka order when it remanded a matter back to the IPO. It allowed an appeal based on a new objection under Section 3(f), which, at the time of the hearing, was the first time such an objection had been raised. No prior notice of this objection was given to the applicant, and the refusal order also listed Section 3(f) of the Patents Act as one of the grounds of refusal.

Condonation of delay

On 31May 2022, the Delhi High Court ruled on a landmark decision that has since been followed in other cases. In European Union v Union of India (WP(C)-IPD 5/2022 and 6/2022), the court decided that under Article 226 of the Indian Constitution, a patent application that has been deemed abandoned because of failure to file a response to the first office action may be reinstated. 

Article 226 grants high courts the power to issue writs. In this case, the applicant’s Indian legal agent failed to inform it that a first office action had been issued in two of its applications. Under Indian law, the first office action must receive a response within six months (the period is extendible by three months). If this is not done, the application in question is deemed to be irretrievably abandoned. The applicant had sent several reminders to the Indian agent inquiring about the status of the application. However, the Indian agent failed to take any action. After engaging with another Indian agent, the applicant was informed that the window for filing a reply to the office actions had expired and therefore, the applications had lapsed. Nevertheless, the second Indian agent filed replies, along with a request to allow the delay. The IPO refused to take the replies on record, on the grounds that the prescribed time had lapsed. The Delhi High Court analysed the different deadlines outlined in the Patents Act, Rules and various judicial pronouncements. The court ruled that the IPO does not have the power under the Patents Act and the Rules to extend the statutory deadlines; however, the courts under writ jurisdiction can in certain circumstances.  In the court’s opinion, the fact that the applicant had consistently tried to inquire about the status of its applications and took steps to retrieve them implied that the applicant never intended to abandon them. The agent’s negligence should not be extended to the applicant, who had been diligent in maintaining its applications.

Accordingly, the court reinstated the applications and instructed the IPO to accept the responses and move the prosecution to the next stage. The court, however, cautioned that this was not a blanket rule and that delays can only be condoned under writ jurisdiction in extraordinary cases, depending on facts and circumstances of each case.

Key takeaways

The decisions revisited here stress the need for the IPO to observe the principles of natural justice. The Delhi High Court has emphasised that providing a reasoned order is absolutely necessary in observation of the doctrine of audi alteram partem.

Stay tuned as we continue to analyse more critical decisions from 2022 in our final part of this series.