A reasoned patent refusal order is ingrained in principles of natural justice: High Court

The Hon’ble High Court (“the Court”) in the matter of Auckland Uniservices Limited V. Assistant Controller of Patents and Designs, set aside the impugned order dated 15 February 2021 and sent it back for consideration as the order lacks the analysis of the invention w.r.t. cited prior arts.

BRIEF FACTS

· On 26 February 2014, the Auckland Uniservices Limited (herein referred to as “Appellant” filed the patent application numbered 1434/DELNP/2014, for the invention titled ‘Magnetic Field Shaping for Inductive Power Transfer’, with 15 claims. Subsequently, an examination request for the application was filed on 4 September 2015. The First Examination Report (‘FER’) generated on 12 July 2018 stated objections pertaining to novelty and inventive step for the claims 1-11 and 15 in purview of prior art documents US20070064406A1 (D1) and WO2010098547A2 (D2), along with other notable objections. In line with the objections, the Appellant filed a reply to the FER along with the amended claims.

· The learned Controller, upon further examination, issued a hearing notice dated 11 September 2020 which contained objection pertaining to inventive step in purview of prior art documents D1 and D2. Henceforth, the hearing was scheduled on 9 October 2020 wherein the learned counsel for the Appellant provided substantive explanation and rebutted all the objections. In addition, the counsel filed post hearing written submissions on 23 October 2020. However, the patent application was rejected under Section 15 of the Patents Act, vide an impugned order dated 15 February 2021. The learned Controller refused the application stating that the subject matter of claims 1-9 lacks inventive step under Section 2(1)(j) of the Act, and a person skilled in the art would be able to arrive at the subject matter in view of the prior art documents D1 and D2.

· It is pertinent to mention that the invention relates to an apparatus for shaping or directing magnetic fields generated or received by magnetic flux generating or receiving apparatus used in inductive power transfer (IPT) systems. The object of the subject invention is to provide an improved apparatus or method for inductive power transfer or an improved IPT power transfer pad, or to at least provide the public or the industry with a useful alternative.

PROMINENT ARGUMENTS BY COUNSELS

· The learned counsel for the Appellant contended that the impugned order is totally unreasoned and the Respondent hasn’t discussed the extensive arguments provided by the Appellant in support of the claimed invention. The counsel stated that it is a settled law that recording of reasons is an essential feature of justice dispensation. It is quintessential to mention that non-recording of reasons would not only lead to a prejudice to the affected party but would also hinder proper administration of justice. In such cases where no valid reasoning is provided, the higher forums cannot take into account the essential factors that were held crucial in reaching a decision.

· The learned counsel for the Respondent, contended that the patent application lacks inventive step in purview of cited prior art documents D1 and D2. The counsel stated that the Respondent has thoroughly analyzed the invention and prior art documents D1 and D2 and has rendered its decision in the impugned order, which isn’t open to judicial intervention.

OPINION OF THE BENCH

· The Hon’ble Court noted that the Respondent has not emphasized enough on the points raised by the Appellant and no analysis has been done before arriving at a decision in the impugned order. Irrespective of judgments being passed by judicial or quasi-judicial bodies, reasoned orders are a mandate to dispose of a matter and valid reasons must be recorded before passing any judgment. It is pertinent to note that the principles of natural justice are indispensable and compliance with the doctrine of audi alteram partem must be done necessarily.

· The Hon’ble Court placed reliance on Assistant Commissioner, Commercial Tax Department, Works Contract and Leasing, Kota v. Shukla and Brothers, (2010) 4 SCC 785, and Pipe Arts India Pvt. Ltd., Sanaswadi v. Gangadhar Nathuji Golamare, 2008 SCC OnLine Bom 289 for emphasizing the mandate of providing valid reasoning in judicial proceedings, in the dispensation of justice.

· The Hon’ble Court understands that it cannot assume the Controller’s role and substitute the decisions given by the quasi-judicial authority. However, it is quintessential to mention that the Hon’ble Court doesn’t intends to intervene in the impugned order case on merits, but it must be noted that the law is clear that decision-making process of quasi-judicial authorities or administrative bodies is not unaffected by judicial intervention.

· The Hon’ble Court noted that a proper procedure must be followed by quasi-judicial authorities in such cases and even referred to F. Hoffmann-La Roche Ltd. & Anr. v. Cipla Ltd., 2015 SCC OnLine Del 13619 for tests for determining the inventive step which are laid down below-

“Step No. 1 To identify an ordinary person skilled in the art,

Step No. 2 To identify the inventive concept embodied in the patent,

Step No. 3 To impute to a normal skilled but unimaginative ordinary person skilled in the art what was common general knowledge in the art at the priority date.

Step No. 4 To identify the differences, if any, between the matter cited and the alleged invention and ascertain whether the differences are ordinary application of law or involve various different steps requiring multiple, theoretical and practical applications,

Step No. 5 To decide whether those differences, viewed in the knowledge of alleged invention, constituted steps which would have been obvious to the ordinary person skilled in the art and rule out a hideside approach.”

· Besides, the Hon’ble Court also placed reliance on the Manual of Patent Office Practice and Procedures which provides guidelines for ascertaining inventive step in a patent application which are laid down below –

“The obviousness must be strictly and objectively judged. While determining inventive step, it is important to look at the invention as a whole. Accordingly, the following points need to be objectively judged to ascertain whether, looking at the invention as a whole, the invention does have inventive step or not:

i. Identify the “person skilled in the art”, i.e. competent craftsman or engineer as distinguished from a mere artisan;

ii. Identify the relevant common general knowledge of that person at the priority date;

iii. Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;

iv. Identify what, if any, differences exist between the matter cited as forming part of the "state of the art" and the inventive concept of the claim or the claim as construed;

v. Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of inventive ingenuity?”

· In its observation, the Hon’ble judge also referred to Agriboard International LLC v. Deputy Controller of Patents and Designs, 2022 SCC OnLine Del 940 which listed down three essential elements that must be considered by the learned controller while rejecting an invention for lack of inventive step. The elements are laid down below:

“24. In the opinion of this Court, while rejecting an invention for lack of inventive step, the Controller has to consider three elements-

• the invention disclosed in the prior art,

• the invention disclosed in the application under consideration, and

• the manner in which subject invention would be obvious to a person skilled in the art.

25. Without a discussion on these three elements, arriving at a bare conclusion that the subject invention is lacking inventive step would not be permissible, unless it is a case where the same is absolutely clear. Section 2(1)(ja) of the Act defines ‘inventive step’ as under:

(ja) “inventive step” means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.

26. Thus, the Controller has to analyse as to what is the existing knowledge and how the person skilled in the art would move from the existing knowledge to the subject invention, captured in the application under consideration. Without such an analysis, the rejection of the patent application under Section 2(1)(ja) of the Act would be contrary to the provision itself. The remaining prior arts which are cited by ld. Counsel having not been considered in the impugned order, the Court does not wish to render any opinion in this regard.”

FINAL JUDGMENT

· While allowing the appeal, the Hon’ble Court said that all foreign applications of subject invention must be considered since the documents cited in the impugned order were also cited in office actions of corresponding US, Japanese (JP), European (EP), and Korean (KR) patent applications. It must be noted that the corresponding US application has been granted over the present invention.

· The Hon’ble Court concluded that since the decision was made in absence of valid reasoning, it is violative of principles of natural justice and hence the impugned order must be set aside. The Hon’ble Court said that the Respondent shall decide the matter within four months from the date of receipt of this order.