"Ensuring Fairness in Patent Adjudication: Madras High Court Emphasizes need for Reasoned Orders and Natural Justice"

Recently, the Hon’ble Madras High Court (hereinafter referred to as ‘the Hon’ble Court’) in the matter of Idemia Identity & Security France vs The Controller General of Patents, Designs and Trademarks [(T) CMA (PT) No.198 of 2023 and (T) CMP (PT) No.21 of 2023] highlighted the importance of issuing a reasoned order and adhering to the principles of natural justice. The case provides valuable insights with respect to the interpretation of Section 3(k) of the Patents Act, 1970 (hereinafter referred to as ‘the Act’), and procedural fairness expected in adjudicating patent applications.

Facts of the Case

An appeal was filed under Section 117-A of the Act by Idemia Identity & Security France (hereinafter referred to as ‘the Appellant’) challenging the impugned order passed by The Controller General of Patents (hereinafter referred to as ‘the Respondent’) refusing grant of patent for an invention titled ‘Cryptography on a Simplified Elliptical Curve’ on the ground that it falls under the purview of Section 3(k) of the Act.

The Appellant contended that since the invention demonstrated a technical effect, it was excluded from the bar of non-patentability under Section 3(k). In this respect, reliance was placed on the European Guidelines for examination of patent as well as the Guidelines framed by the Indian Patent Office for examining computer related inventions (CRI Guidelines).

On the other hand, the Respondent was of the view that since a mathematical formula has been adopted by the Appellant, which resulted in the Appellant's claimed invention, the question of granting patent did not arise in view of the statutory bar under Section 3(k) of the Act. Additionally, it was asserted that the invention adopted a ‘business method’ for the purpose of claiming invention, which was also barred under Section 3(k) of the Act.

In so far as the objection relating to ‘business method’ was concerned, the Appellant averred that the Hearing Notice issued in the matter did not made any reference to business method, but despite the same, the respondents have included that reason as well for refusing to grant patent.

The Appellant further argued that the impugned order failed to address its submissions comprehensively and violated principles of natural justice by introducing new grounds of rejection (i.e., adoption of a business method) in the refusal order without including it in the hearing notice.

Analysis by the Hon’ble Court

The Hon’ble Court examined the scope of exclusions under Section 3(k) of the Act, which bars from patentability mathematical or business methods, algorithms, or computer programs per se. Referring to the 2002 Amendment that introduced the qualifier ‘per se’ in said Section, the Hon’ble Court emphasized that the exclusion does not apply to software innovations exhibiting technical application or technical impact.

After a detailed analysis of the invention and the technical effect attributed by it, the Hon’ble Court was of the view that the Respondent failed to address the contentions of the Appellant. It explicated on the exception to Section 3(k), emphasizing that if the Appellant's claimed invention is a technical contribution made by them, the invention is patentable.

The Hon’ble Court held the impugned order deficient for failing to consider the exceptions to the concerned Section, as also highlighted in the Indian and European guidelines. Further, it observed that the ground of ‘adoption of business method’ was also not supported by a speaking order, and was introduced without prior notice, thereby violating the principles of natural justice.

Conclusion

The Hon’ble Court thus quashed the impugned refusal order, for being a non-speaking order due to its failure to address the Appellant’s contentions, and for being passed in violation of principles of natural justice for raising the ground of ‘business method’ without prior communication of the same in the Hearing Notice. Consequently, the matter was remanded to the Respondent for fresh consideration.

This case reiterates the importance of examining the technical merits of software-based inventions under Section 3(k) and underscores procedural safeguards to ensure fair and equitable.