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Written by Keerthana M, Lawyer, and Verified by Sunil Jose, Managing Attorney, Suns Legal.

Intervet International B.V. and Microbial Chemistry Research Foundation V. The Deputy Controller of Patents & Designs (T) CMA (PT) No.119 Of 2023

A reasoned decision or Speaking order is considered to be the third principle of natural justice. It means that whatever the decision may be, it must be supported by reasons explaining why such a decision was made. In this appeal, the Madras High Court set aside an order refusing the grant of patent. The order was found to be non-speaking and in violation of the principles of natural justice.

Intervet International B.V. and Microbial Chemistry Research Foundation (“Appellants”) applied for a patent on their invention related to the solvated and non-solvated crystalline forms of 20,23-dipiperidinyl-5-O-mycaminosyl-tylonolide, which possess advantageous physical and chemical stability, thermodynamic, kinetic, and filtration properties. They claimed that the invention has technical advancements, economic significance, and is non-obvious to a person skilled in the art. However, the Deputy Controller of Patents & Designs (“Respondent”) rejected the application as non-patentable, citing Sections 3(d) and 3(e) of the Patents Act, 1970.

The appellants claimed that the respondent’s order refusing the grant of patent violated the principles of natural justice as it was not a speaking order. They argued that the respondent ignored the Expert Affidavit by Dr. Ralph Warass, which clearly demonstrated the higher stability of the claimed invention. The appellants contended that the respondent arbitrarily held that superior stability data did not constitute an enhancement of known efficacy, thereby attracting Section 3(d).

The appellants touched upon Regents of the University of California vs. Union of India and others, 2019 (79) PTC 55 (Del), which stated that the Controller should indicate the reasons for rejecting the affidavit of known experts. They further submitted that a more stable drug would not decompose into its byproducts, resulting in higher bioavailability and therapeutic efficacy.

The appellants argued that the respondent did not follow the guidelines for the examination of patent applications issued by the Controller General of Patents, Designs, and Trademarks in October 2014, rendering the impugned order ex facie erroneous. They also contended that a patent should have been granted to the appellants, as the respondent had already admitted in the impugned order that the claimed invention is a new form of a known substance.

Furthermore, the appellants submitted that Section 3(e) had been erroneously applied since the invention includes a new form of a known substance and can be distinguished from prior art. They added that the requirement under Section 10(4)(a) does not mandate providing synergistic data of the individual constituents of the claimed composition.

The appellants, by citing Manohar vs. State of Maharashtra and another 2012 (13) SCC 14, submitted that since the impugned order was passed without proper application of mind and is not supported by reasons, it must be set aside by the Court for violating the principles of natural justice. They also contended that they need not “plead” enhanced therapeutic efficacy in the invention, as it is sufficient to “prove” it.

The respondent submitted that the appellants completely failed to establish that the enhanced stability resulted in enhanced therapeutic efficacy. By relying on Novartis AG vs. Union of India and others MANU/SC/0281/2013, the respondent also contended that the claimed invention failed to meet the standards prescribed by the Hon’ble Supreme Court for granting a patent to a new form of a pharmaceutical substance and that increased stability is insufficient unless it results in enhanced therapeutic efficacy. Thus, the respondent argued that the impugned order is a speaking order and that there is no violation of the principles of natural justice.

The court noted that the prior art D1 cited by the respondent did not disclose all the relevant information related to the invention, and D2 was published after the priority date of the patent application. The respondent’s observation that superior stability data could never be interpreted as superior therapeutic efficacy was not supported by reason. The appellants were also not given an opportunity to prove that their invention is a new form of a known substance with enhanced therapeutic efficacy. The fact that the Expert Affidavit was ignored was also pointed out by the court. Thus, the court was convinced that the impugned order is a non-speaking order and has been passed in violation of the principles of natural justice.

The court mentioned that since the appellants had categorically stated that their invention has enhanced therapeutic efficacy, it would not be affected by any subsections of Sections 3 and 4. The appellants were also entitled by the court to amend their original patent application to strengthen their case for the grant of the patent.

The court reiterated the importance of reasoned orders and emphasized adherence to doctrines like ‘audi alteram partem’ and the principles of natural justice. It was held that the impugned order violated the principles of natural justice and was a non-speaking order, thus it needed to be quashed. The court also directed that the matter be remanded back to the respondent for fresh consideration and to appoint a new officer to adjudicate the appellants’ patent application to avoid the possibility of pre-determination.

COMMENTS

The case highlights the importance of speaking orders, especially in matters related to the refusal of granting a patent. Relevant discussions on this point can be found in precedents such as Nippon Steel Corporation vs Controller General Of Patents, Designs 2024 DHC 6514 and Agriboard International LLC v. Deputy Controller of Patents and Designs, 2022 SCC Online Del 940 etc.

This case emphasizes that providing reasons for the refusal of grant of patent is essential to ensure fairness and avoid arbitrary decisions thereby adhering to the principles of natural justice.