Patent rejection orders must contain independent reasoning; verbatim reproduction of prior art violates natural justice.

In brief

The question

1. Whether the impugned order passed by the Controller of Patents is sustainable in law given the alleged lack of reasoning and violation of natural justice

The court held

The Court held that the impugned order was unsustainable as it lacked reasoning and violated the principles of natural justice

It also directed

The Court quashed and set aside the order dated 26.05.2020 and remitted the matter back to the Controller for de novo consideration. The Court directed that the application be heard by a different Assistant Controller/Controller and disposed of within four months. The appeal was allowed without costs, with a clarification that the Court had not examined the merits of the patent application

01Facts

The appellant, Nippon Steel Corporation, filed an Indian patent application (No. 10182/DELNP/2012) titled "Process for Production of Unidirectional Electromagnetic Steel Sheet" on 23.11.2012

pp. 1-2

Following the issuance of a First Examination Report (FER) in 2018 and a subsequent hearing in February 2020, the Respondent (Controller of Patents) issued an order dated 26.05.2020 refusing the patent application

pp. 2-3

The refusal was based on a purported lack of "inventive step" under Section 2(1)(ja) of the Patents Act, 1970

p. 3

The appellant challenged this order on the grounds that it was unreasoned, violated the principles of natural justice, and merely reproduced the text of cited prior art documents (D1, D2, and D3) without independent analysis

pp. 2-3

02Issues

i.1. Whether the impugned order passed by the Controller of Patents is sustainable in law given the alleged lack of reasoning and violation of natural justice

p. 2 / para. 5

ii.2. Whether the Controller is required to provide a specific analytical framework when rejecting a patent application for lack of inventive step under Section 2(1)(ja)

p. 8 / para. 9

03Law Applied

The court primarily applied Section 2(1)(ja) of the Patents Act, 1970, which defines "inventive step" as a feature involving technical advancement or economic significance that makes an invention non-obvious to a person skilled in the art

p. 9

The court relied on the precedent set in Agriboard International LLC. v. Deputy Controller of Patents and Designs, which mandates that the Controller must analyze three elements: the prior art, the subject invention, and the manner in which the invention is obvious to a skilled person

pp. 8-9

the court emphasized the requirement for quasi-judicial authorities to pass "reasoned orders" as a cornerstone of natural justice

pp. 9-10

Provisions in the judgment · 3 · Linked ones open on LawLens

Patents Act, 1970 Section 2 Section 3 Section 15

04Reasoning

The Court perused the impugned order and found that the "Scientific and Technical Analysis" section was almost entirely a verbatim reproduction of the cited prior art documents D1, D2, and D3

pp. 5-8

The Court observed that the Controller failed to engage with the appellant's detailed submissions or explain how the claimed invention would be obvious to a person skilled in the art

p. 8

It was noted that simply stating that an applicant "fails to persuade" or that an invention "lacks inventive step" without discussing the transition from existing knowledge to the subject invention is insufficient

pp. 8-9

The Court held that because the Controller provided no independent reasoning or comparison between the prior art and the appellant's claims, the order was bereft of application of mind and could not be sustained

p. 8, 10