Madras High Court Emphasizes Procedural Fairness and Natural Justice in Patent Proceedings, Sets Aside Refusal Order

Introduction

In a significant ruling highlighting the importance of procedural fairness in patent proceedings, the Hon’ble Madras High Court, in its recent judgement dated November 21, 2024, in the case of Intervet International B.V. & Anr. vs Deputy Controller of Patents and Design [(T)CMA(PT) No. 119 of 2023], emphasized the importance of reasoned and speaking orders. The Hon’ble Court underscored the importance of adhering to the principles of natural justice, particularly the doctrine of audi alteram partem. In light of these principles, the Hon’ble Court set aside the refusal order and remanded the matter back to the Patent Office for fresh consideration. 

Facts of the Case

The present appeal was instituted by Intervet International B.V. and Microbial Chemistry Research Foundation (hereinafter referred to as the “Appellants”) challenging the impugned order dated December 29, 2017 passed by the Deputy Controller of Patents & Design (hereinafter referred to as the “Respondent”) through which the Appellants’ application 449/CHENP/2010 for an invention titled “MACROLIDE SOLID-STATE FORMS” was refused by the Indian Patent Office on the grounds of non-patentability under Section 3(d) and 3(e) of the Indian Patent Act, 1970 (hereinafter referred to as “the Act”).

Contentions of the Appellants

The Appellants contended that the impugned order passed by the Respondent was a non-speaking order which violated the principles of natural justice. The Appellants emphasized that the claimed invention relates to solvated and non-solvated crystalline forms of 20, 23 dipiperidinyl-5-O-mycaminosyl-tylonolide, which exhibits advantageous physical and chemical stability, thermodynamic, kinetic and filtration properties, which has technical advancements as well as economic significance, and is also non-obvious, hence the Respondent has erred in applying Section 3(d) and 3(e) of the Act to refuse the application. 

With respect to Section 3(d), the Appellants contended that the Respondent failed to consider the declaration of the expert Dr. Ralf Warrass, who clearly demonstrated the higher stability of the claimed crystalline form. The Appellants emphasized that stability plays an important role in therapeutic efficacy, as a more stable drug will not decompose into byproducts, resulting in higher and longer bio-availability, which in turn results in higher therapeutic efficacy. It was argued that the Respondent did not question the correctness of the submitted data and under the impugned order, arbitrarily held that superior stability data does not constitute enhancement of the known efficacy, thus, violating the principles of natural justice. Relying upon a judgement of the Hon’ble Delhi High Court in the case of Regents of University of California vs. Union of India and others, the Appellants argued that the Controller is obligated to provide reasons for rejecting the affidavit of known experts, and that the impugned order should be set aside for lacking reasoning, thus violating the principles of natural justice. 

It was further argued that the Respondent has erred in applying Section 3(e) of the Act as it was admitted in the impugned order that the claimed polymorphic form is a novel form (crystalline form) of dipiperidinyl-5-O-mycaminosyl-tylonolide. Further, the Appellants submitted that the active ingredient of the claimed composition is admittedly a novel ingredient with unexpected qualities of superior stability and exhibits technical advancement over the cited prior art. The Appellant while citing Section 10(4)(a) of the Act (which outlines sufficiency of disclosure requirements) argued that there is no obligation to provide synergistic data of the related activities of the individual constituents of the claimed composition.

The Appellants while relying upon a judgment of the Hon’ble Delhi High Court in the case of DS Biopharma Limited vs. The Controller of Patents and Designs and another also contended that proof of enhanced therapeutic efficacy is sufficient to establish patentability of the invention, and it is not necessary to plead that there is an enhanced therapeutic efficacy in the invention. Further, it was also highlighted that similar patent applications have already been granted in multiple jurisdictions such as the USA, Russia, Japan, Australia and other countries.

Contentions of the Respondent

The Respondent asserted that the impugned order was a speaking order and adhered to principles of natural justice. The Respondent relied on upon a judgement of the Hon’ble Supreme Court in Novartis AG vs. Union of India and others and submitted that the increased stability is insufficient unless it results in enhanced therapeutic efficacy. 

Analysis and Findings of the Hon’ble Court

The Hon’ble Court was of the opinion that the Appellants were not given an opportunity as per the explanation to Section 3(d) of the Act to prove that the claimed invention is a new form of known substance, having enhanced therapeutic efficacy. The Hon’ble Court further held that the Expert Affidavit of Dr. Ralf Warrass was not given due consideration in the impugned order. The Court opined that the Controller must indicate the reasons for the refusal of the affidavit of experts. It was held that the Respondent failed to provide any reasoning in the impugned order for contradicting the Appellants’ contention that a more stable drug would not enhances therapeutic efficacy, thus the impugned order was passed in violation of Section 3(d) of the Act, and also in violation of principles of natural justice.

The Hon’ble Court raised further concerns about the unreasoned order rejecting the application, particularly after acknowledging that the claimed polymorphic form was a novel form (crystalline form) of a known compound. The Hon’ble Court opined that no reason had been given by the Respondent for applying Section 3(e) of the Act to refuse the application.

Relying on Novartis AG vs. Union of India (UOI) and others and DS Biopharma Limited vs The Controller of Patents and Designs and another, the Court pointed out that “it would suffice if the Applicants are able to prove that their claimed invention has enhanced therapeutic efficacy and there is no necessity to take a specific plea in their application that the claimed invention has therapeutic efficacy”. The Court opined that “only in cases of revocation of patents, a specific plea will have to be taken that the invention does not have enhanced therapeutic efficacy and the person seeking revocation also has to prove that the invention does not have therapeutic efficacy and therefore, it is hit by Section 3(d) of the Patents Act”.

The Hon’ble Court was of the view that objections raised with regard to prior art documents were not in accordance of law since the prior art were either not disclosing the crystalline form, or were published after the priority date of the patent application. 

The Hon’ble Court ruled that the Respondent has not accorded sufficient attention to the points raised by the Appellants and has not conducted a proper analysis of the contentions of the Appellant prior to the issuance of the impugned order.

Conclusion

The Hon’ble Court concluded that the impugned order passed by the Respondent violates the principles of natural justice and constitutes a non-speaking order with respect to Appellants’ contentions. Consequently, the impugned order is set aside and remanded back to the Patent Office for re-consideration by a different Controller.