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Written by Maria Therese Syriac, Legal intern, and verified by Sunil Jose, Managing Attorney, Suns Legal.

Signal Pharmaceuticals vs. Deputy Controller of Patents ((T)C.M.A(PT).No.145 of 2023)

What happens when the system designed to protect medical innovation ends up standing in its way? The Madras High Court recently examined one such case in Signal Pharmaceuticals vs. Deputy Controller of Patents ((T)C.M.A(PT).No.145 of 2023), where an innovative cancer detection compound was almost denied a patent.

The case concerns Signal Pharmaceuticals’ patent application for “mTOR kinase inhibitors.” These compounds assist in cancer detection through their high mTOR activity, which regulates cell growth, proliferation, survival, and metabolism. The company had applied to obtain a patent of this particular invention as per Patents Act, 1970.

Let us understand whether the pharmaceutical company developed a new compound or simply employed evergreening, a tactic used by pharmaceutical companies to prolong patent life by making minor modifications to an existing product.

The Case

Signal Pharmaceuticals, a San Diego-based company, filed an appeal against the Deputy Controller of Patents’ order. The impugned order had rejected their patent application for “mTOR kinase inhibitors for oncology indications and disease associated with the mTOR/P13K/AKT Pathway” – specialized compounds designed for cancer detection through high mTOR activity. The patent office rejected 19 claims, citing fundamental issues with inventive steps under Section 2(1)(ja) and non-patentability under Section 3(d) of the Patents Act and issued a non-speaking order,  essentially a decision lacking proper reasoning as to why they reached the said/specified conclusion, thus violating the legal precedents set by the Constitutional Courts.

Legal Issues

The primary contention centered on the patent office’s analysis of technical differences between Signal’s invention and existing prior art. Signal’s compounds featured core rings with six variable positions containing carbon or heteroatom, plus three positions for variable substituents. This structure differed from their prior art, which primarily dealt with compounds containing a fused 5-membered ring.

The second major issue involved the patent office’s evaluation of therapeutic efficacy. Signal had submitted comprehensive documentation, including expert affidavits, amended claims, and written submissions how their invention has enhanced biological activity compared to prior art. However, the patent office’s order failed to address these substantial submissions or provide a reasoned analysis of why they were insufficient.

Appellant’s Contentions

Signal Pharmaceuticals contended that the order needed to be more specific regarding their invention process and indicated an apparent lack of reasoning.

The appellant argued that the respondent failed to appreciate the evidence placed on record properly and ignored the evident gap between amended claims and prior art. They emphasized that their invention’s core rings had different structures from the prior art, with six variable positions and significantly higher biological activity. The appellant also emphasised that they obtained patents for similar inventions in the US and Europe.

The appellant relied on precedents including the Avery Dennison Corporation case to argue that their technical advancement satisfied inventive step requirements. They also pointed to the Blackberry Ltd. case, where the Delhi High Court had cautioned against unreasoned orders by the Patent Office.

Respondent’s Arguments

The Deputy Controller of Patents maintained that the prior art and the core structure of the claimed invention were identical. The respondent contended that the impugned order was indeed a speaking order that correctly addressed the appellant’s contentions. They contended that the claimed invention did not satisfy the test of therapeutic efficacy, and therefore, the patent was rightly refused.

The respondent further argued that their rejection was based on proper reasons regarding lack of inventive steps and non-patentability under Section 3(d) of the Patents Act. They maintained that Signal’s invention showed no technical advancement and, therefore, fell squarely within prohibitions under Section 3(d).

The Court’s Analysis

The Court found that the impugned order ultimately failed to analyze the technical distinctions between pyrazino pyrazine core structure and the prior art’s fused 5-membered ring. Additionally, the patent office should have considered the amended claims or responses to First Examination Report objections and, importantly, had not evaluated the expert affidavit dated 19.03.2019. Most critically, the order provided no reasoning for why Signal’s invention failed to meet the therapeutic efficacy test established in Novartis AG vs. Union of India.

The judgment referenced Novartis AG vs. Union of India ((2013) 6 SCC 1) for its definitive therapeutic efficacy test in pharmaceutical patents. It also cited Blackberry Ltd. vs. Assistant Controller of Patents (C.A. (COMM.IPD-PAT) 57/2022) regarding the fundamental requirement for reasoned orders in patent decisions. Additionally, the court relied on Avery Dennison Corporation vs. Controller of Patents ( 2022/DHC/004697) to establish standards for technical advancement satisfying inventive step requirements. These precedents supported the Court’s position that patent offices must provide detailed, reasoned orders when rejecting pharmaceutical patent applications.

The Verdict and Impact

The Madras High Court issued a decisive ruling that quashed the patent office’s order. The court mandated a fresh examination with specific guidelines, requiring that a different patent officer undertake the reconsideration and that the new examination must thoroughly account for the court’s observations. Furthermore, the court directed that amendment applications to complete specifications or claims should be permitted within the framework, and a fresh order must be passed within six months.

The judgment upholds three principles:

First, patent office orders must provide reasoning, especially when rejecting applications involving technical innovations. Merely stating conclusions without analyzing technical distinctions, amended claims, and submitted evidence is insufficient.

Second, when examining pharmaceutical patents, the therapeutic efficacy test established in Novartis case must be properly applied and reasoned. Patent offices cannot merely cite Section 3(d) without explaining why an invention fails to meet this standard.

Third, procedural fairness requires thorough consideration of all submitted materials, including amended claims, expert affidavits, and responses to examination reports. The failure to consider such evidence can be grounds for setting aside the patent office’s decision.

Conclusion

The Madras High Court’s decision reaffirms the necessity of reasoned decision-making. The court has established guidelines for patent examination, by mandating detailed technical analysis and procedural fairness, ensuring that innovative pharmaceutical compounds receive substantive, evidence-based evaluation rather than cursory examination.