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Patent Rejections and Natural Justice

LexOrbis India


The rejection of a patent by the patent office is a stigma on the inventor who toils hard to bring his invention to reality after spending days of laborious research and experiments.  When rejection is based on frivolous and seemingly unsound reasons the inventor cries foul and seeks refuge under the doctrine of the principle of natural justice in the appellate court. When the appellate court took several years to resolve the grievance of the inventor and in some cases, the term of the patent also expired, Government came up with a robust alternate mechanism for dispute resolution in the Intellectual Property Appellate Board. Intellectual Property Board laid the foundation for the quick disposal of appeals from the decisions of the Controller of the patents. The concept of natural justice remained a hallmark of many decisions of the IPAB till the appellate jurisdiction is restored with the Commercial courts within the High Courts. High courts were harsher and more cryptic to reprimand the Controllers who were not observing the solemn principle of natural Justice enshrined within the ambit of the Code of Civil Procedure, 1908.

Recently, Justice C Hari Shankar, in Dolby International Ab vs The Assistant Controller of Patents And Designs found passing of a "copy-paste" order while refusing an application for grant of a patent, bad to the extent that he lamented that “This Court is, frankly, aghast at the manner in which the impugned order has been passed”, and critically observed that “Such cut-and-paste orders do little justice to the solemn functions which have been entrusted on the officers in the office of the Controller of Patents and Designs.” In this case, the court while remanding the case to the Controller, went on to the extent of directing the Controller General to change the officer who has passed the order, when the court said that “Needless to say, the matter would not be decided by the officer who has passed the impugned order.”

Applicability of Principles of Natural Justice

If we read Section 77 which vests certain powers of a civil court to the Controller, we will find that though the Code of Civil Procedure 1908 does not apply to the proceedings before the Controller yet the principles underlying this Code, in so far as they are principles of natural justice, must of course be observed by him. As late as 1932, Justice Panckridge, in Re.: National Carbon Co. AIR 1934 Cal 725, ruled that:

“17. I think the answer to this is that the Code of Civil Procedure is not applicable to proceedings before the Controller. The principles underlying the Code, in so far as they are principles of natural justice, must of course be observed by him, as they must be observed by all authorities exercising judicial or quasi-judicial functions. How far, if at all, according to those principles the patentees have prejudiced their rights by their conduct in respect of the proposed application to the Court is for the Controller to decide.” [Emphasis added]

Controller as Custodian of Natural Justice

Under Section 77 of the Patents Act 1970, the Controller exercise very wide and certain quasi-judicial powers. It will not wrong to say that Controller functioning under Patents Act is akin to judicial functioning rather than the administrative decision-making process. It is a settled principle of law that adherence to the principles of natural justice is mandatory for such Tribunals or bodies discharging such functions. The Controller has been vested with wide powers including refusal of patent applications.

Expending Ambit of Principles of Natural Justice

Appellate Courts in India are alive to deal with any situation where it is found that the refusal of a patent by the Controller negates the adjudicatory process particularly where it is not in consonance with the principles of natural justice, including the doctrine of 'audi alteram partem’ or ‘non-speaking orders’. To be more precise, the appellant's argument of violation of the principle of natural justice became a handy tool for getting favourable decisions against the violation of PNJ by the Controller.

Reported cases on violation of the Principles of Natural Justice

  1. Opposition Board's report not given to the parties

After the National Carbon case there was not much on violation of the principle of natural under the patent law jurisprudence till in Hoffman La Roche AG vs Controller [14 of 2014] an appeal filed by a post-grant opponent was allowed by the IPAB on the grounds that “the impugned order was passed in flagrant violation of the Principles of Natural Justice”. Not only was the Opposition Board's report not given to the parties, but the Controller also failed to send to the Opposition Board all of the evidence submitted by the parties.

  1. Objections not communicated

In the same year in Warner Lambart Co. vs Controller [61/2014] IPAB categorically ruled that all objections must be communicated to meet them in the hearing. Non-communication of the objection before hearing and refusal amount to a flagrant violation of Natural Justice.

  1. Arbitrary decision

In Siemens AG vs Controller of IPA Board quashed the order of the Controller being mechanical and taken arbitrarily while giving total goby to established procedure and conventions. Boards quipped it as non-application of mind with flagrant violation of PNJ. [107/2014]

  1. Examiner and Controller same person

In Telefonaktiebolaget LM Ericson vs Controller [108/2014] the IPA Board quashed the order of the Controller where and Examiner and Controller were the same person. IPA Board found this as a blatant and flagrant violation of PNJ.

  1. Controller not an adversary of the patent applicant

It is known that the Controller acts as custodian of the public interest at large. The basic purpose of examination of the patent application before grant serves the function of safeguarding the public interest. When any prior art is found, or the subject matter of invention fails to pass the patent eligibility test as enshrined in the patent law the patent office is duty bound to inform all the abjection to the applicant before any decision to refuse the application is taken. While doing so Controller is not acting as an adversary to the applicant. In Resprotect GmbH vs The Controller of Patents & Designs & Anr., [OA/23/2010/PT/DEL] IPA Board held that “the Patent Office while dealing with grant of a patent, exercises quasi-judicial power and a quasi-judicial authority is not an adversary of the patent applicant." Therefore, it is the primary duty of the quasi-judicial authority to communicate all the objections before the hearing is conducted to take a final decision on the matter. 

Conclusion

Exercise of the power to refuse a patent is bound to adversely affect the rights of the patent applicant/inventors. Thus, the provisions relating to refusal have to be construed strictly. The cases where the plea of violation of the principle of natural Justice is placed before the appellate court, the court looks into that issue before going into the merits of the case as it expected from the Controller to strictly follow the adjudicatory process in consonance with the principles of natural justice. It is not expected from the Controller to breach any of these principles, particularly when its orders are open to judicial review. More so when appellate Courts have made compliance to the principle of the rule of natural justice obligatory to the Controller in several decisions staring as precedence. If this function is not judicially exercised by the controller the courts will surely find it a violation of the principle of natural justice.

This is what the court found in DS Biopharma Limited vs The Controller of Patents and Designs and Anr, where DS Biopharma's patent application for “Compositions comprising 15-oxo-epaor15-oxodgla and methods of making and using same” was rejected on the objections that were not explicitly raised at the hearing stage. The court quashed the order for a clear violation of natural justice principles by the Controller and remanded the case back for a fresh hearing. [CA (COMM IPD-PAT) 6/2021)] The court found the argument of the Appellant convincing as this was reinforced by many decisions of the IPAB and it was a clear violation of the principles of natural justice. CGPDTM may issue clear guidelines to the Controllers to strictly follow the principles of Natural justice while disposing of any application for patents. It must be ensured that all objections that may form the ground for rejection of the patent must be communicated to the applicant before the date of the hearing. The appellant's argument of violation of the principle of natural justice has become an effective instrument of appeal for getting favourable decisions against the violation of PNJ by the Controller.

 

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