INDIA: HC reaffirms the touchstone for inventive step analysis and the importance of reasoned orders

A recent decision of the Delhi High Court, in Impact Selector International LLC vs Controller of Patents [C.A.(COMM.IPD-PAT) 138/2022], set aside a refusal order passed by the Controller in a cryptic manner without going into the explanation/justification with regard to lack of inventive step and remanded the application back to the Patent Office for fresh consideration.

Brief facts of the case:

The Applicant had filed a national phase application on 28th April, 2006 bearing application no. 2366/DELNP/2006 (hereinafter "subject application") under Patent Cooperation Treaty (PCT) claiming priority from US Application No.10/696,823 dated 30th October, 2003.

A First Examination Report (Office Action) was issued by the Indian Patent Office after much delay, on 12th February, 2014. Subsequent to which, the Applicant filed a detailed response with regard to novelty and inventive step.

A hearing was scheduled for 12th July, 2017, wherein the objection pertaining to lack of inventive step was sustained. According to Rule 28(7) of the Patent Rules, 2003, the Applicant is given a 15-day window following the hearing date to file the written submissions. However, at the insistence of the Controller (hereinafter "Respondent"), the Applicant filed the written submissions addressing the prior arts mentioned by the Patent Office and demonstrating how the subject application is discernible from the prior art, on the date of the hearing under protest.

Thereafter, the Respondent passed an order (hereinafter "impugned order") rejecting the subject application on the ground of lack of inventive step on the very same date on which hearing took place and the written submissions were filed.

Thus, the Applicant filed the present appeal under Section 117A of the Patents Act challenging the said order.

Findings of the Hon’ble Court:

· Rule 28(7) of the Patents Rules, 2003:

The Honb’le Court observed that Rule 28(7) of the Patents Rules, 2003 provides the Applicant, the right to file the written submissions within fifteen days from the date of hearing. The relevant portion of said Rule is stated below:

"28. Procedure in case of anticipation by prior publication.

(7) In all cases of hearing, written submissions and the relevant documents, if any, shall be filed within fifteen days from the date of hearing."

The Hon’ble Court noted that the Respondent had insisted the Applicant to file the written submissions on the same date of hearing and this in the view of the Hon’ble Court was a clear violation of Rule 28(7) of the Patent Rules, 2003. The Hon’ble Court asserted that the Controller should have granted fifteen days' time to the Applicant to file written submissions in accordance with the said Rule.

· Reasonability of the impugned order:

With regard to the issue of the impugned order being cryptic and unreasoned, the Hon’ble Court relied upon the judgments in Agriboard International LLC v. Deputy Controller of Patents and Designs [2022 SCC OnLine Del 940], Auckland Uniservices Limited v. Assistant Controller of Patents and Designs [C.A.(COMM-IPD-PAT) 8/2022], N.V. Satheesh Madhav and Anr. v. Deputy Controller of Patents and Designs [2022 SCC OnLine Del 4568] and Alfred Von Schukmann v. The Controller General of Patents, Designs and Trademarks and Ors. [C.A.(COMM.IPD-PAT) 435/2022], wherein it was time and again held that the Patent Office is required to pass a speaking order analyzing what is the existing knowledge and how the subject invention lacks inventiveness in light of the prior art.

The relevant observation in Agriboard international (supra) is set out below:

"23. The said reasoning has been reiterated by the Supreme Court in Manohar v. State of Maharashtra & Ors. AIR 2013 SC 681 wherein it has been categorically observed that application of mind and recording of reasoned decision are the basic elements of natural justice. There can be no doubt that scrupulous adherence to these principles would be required while rejecting patent applications”.

The Hon’ble Court opined that while rejecting an invention for lack of inventive step, the Controller has to consider three elements-

1. the invention disclosed in the prior art;

2. the invention disclosed in the application under consideration; and

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

The Hon’ble Court asserted that a bare conclusion that the subject invention is lacking inventive step without a discussion on the above three elements, would be impermissible, unless it is a case where the same is absolutely clear. 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.

Further, the Hon’ble Court observed that despite filing detailed submissions by the Applicant seeking to distinguish the prior art from the subject invention, the impugned order had been passed in a cryptic manner without going into the explanation/justification offered on behalf of the Applicant with regard to the prior art. The impugned order simply jumped to a conclusion that the subject invention lacked inventive step. However, there was no discussion as to why the subject invention would be hit by the prior art.

Decision of the Hon’ble Court:

The impugned order rejecting the patent application of the Applicant was set aside and the matter was remanded back to the Patent Office for fresh consideration. Further, in view of the facts and circumstances of the case and in order to obviate the possibility of any apprehension of pre-determination, the Hon’ble Court deemed it appropriate to place the matter before an Officer other than the Officer who had passed the impugned order.