High Court holds non-reasoned refusal as “cryptic”, remands patent application for reconsideration

Introduction

In a recent appeal filed before the Hon’ble High Court of Delhi in the case of Otsuka Pharmaceutical Co Ltd. VsThe Controller Of Patents[1], while dismissing the refusal order based on a conclusion of non-patentability asserted that “non-recording of reasons for refusal of a patent application could lead to dual infirmities, firstly, it may cause prejudice to the affected party and secondly, hamper proper administration of justice. A judgment without reasons causes prejudice to the person against whom it is delivered as the litigant is unable to know the grounds which weighed with the Court in rejecting his claim as also caused impediments in his taking adequate and appropriate grounds before the higher Court in case of challenge to the judgment (sic).”

Background

The present appeal was instituted by Otsuka Pharmaceutical Co Ltd. (hereinafter the “Appellant”) challenging the impugned order by the Controller of Patents (hereinafter the “Respondent”) through which the Appellant’s application (8198/DELNP/2013) for an invention titled "Combinations comprising Brexpiprazole or a salt thereof and a second drug for use in the treatment of a CNS disorder” was refused by the Indian Patent Office. The subject application was refused on the ground that section 2(1)(j) of the Patents Act, 1970 (“the Act”), which defines “invention”, was not complied with.

It was the case of the Appellant that the impugned order was completely unreasoned, thus, suffered from gross illegalities and infirmities. As per the Appellant, the Respondent failed to appreciate that the subject invention meets the requirements of inventive step and without considering that the claimed medicament combination is not known from any of the prior arts or combinations thereof, has refused the application. The Appellant affirmed that the impugned order stands vitiated, on account of violation of principles of natural justice, as the Respondent considered documents D2 and D3, which were never cited in the hearing notice, for rejecting the application on ground of lack of inventive step, despite unequivocally mentioning that the objections were based only on documents D1 and D4. Further, it was alleged that the Respondent deprived the Appellant of an opportunity and a valuable right to meet the objections raised, thereby violating the principle of audi alterem partem.

It was argued that the Respondent came to a conclusion that subject matter of claims 1-6 lacks inventive step under Section 2(1) (ja) of the Act by relying on certain categories of inventions which fall under Section 3(d) of the Act. Therefore, it was argued that the impugned order was based on the application of incorrect standards for determining the ‘inventive step requirement’. As per the Appellant, it is settled that ‘inventive step’ has to be judged independent of Section 3(d), and even assuming the invention falls under the scope of Section 3(d), it is not automatically disqualified from meeting the requirements of Section 2(1)(j) of the Act.

Findings of the Court

The Court, while analysing the impugned order observed that if the Respondent 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 and that too without affording an opportunity to the Appellant to respond to the prior arts D2 and D3. The Court upheld that the Respondent indeed violated the doctrine of audi alterem partem, which was sufficient to remand the matter for fresh adjudication. Moreover, the Court noted that the Respondent did not take into consideration the arguments as well as precedents presented by the Applicant while coming to a conclusion on non-patentability under Section 3(d) of the Act. The Court held that since no reasons were discernible in the order which weighed with the Respondent to arrive at the said conclusion, the impugned order cannot be termed anything but cryptic and unreasoned.

Another pertinent observation was that the corresponding application was granted in major jurisdictions inter alia Japan, Indonesia, Australia, Malaysia, etc. which ought to have been taken into account by the Respondent.

In view of the aforementioned findings, the Court relied on a host of judgements that while arriving at the conclusion that there is a lack of inventive step, there was no elaboration or reasons given by the Respondent as to why the application is being held to be lacking inventive step.

The Appeal was accordingly decided in favour of the Appellant and the application was remanded back to the Respondent for fresh consideration.

Conclusion

Similar issue was dealt with in the case of Gogoro Inc. vs The Controller of Patents And Designs & Anr., wherein it was asserted that in the absence of a reasoned analysis into the subject matter of an invention, arriving at a bare conclusion for rejection would be contrary to the provisions of the Act. Judgements of this nature play a significant role in preserving the rights of Applicants against arbitrary and unreasoned decisions refusing their application. The Hon’ble High Court of Delhi has been active and vigilant in the recent past against dismissal of patent applications, without proper reasoning.

[1] C.A.(COMM.IPD-PAT) 2/2022