Delhi High Court Reinstates Patent Application : When Inventive Step and Enhanced Efficacy demands clarity.

Name of the case: Taiho Pharmaceutical Co. Ltd. v. The Controller of Patents C.A. (COMM.IPD-PAT) 6/2022

Pronounced on 15.05.2025

Coram : Hon’ble Mr. Justice Amit Bansal

Facts:

An application was filed under Section 117A of the Patents Act, 1970, challenging an order dated 18 June 2021 issued by the Assistant Controller of Patents and Designs. The order refused a patent application for "Novel Piperidine Compound or Salt."

The Controller had rejected the application under section 2(1)(ja) i.e., not an inventive step, and non-patentable under section 3(d), i.e., a new form of a known substance without enhanced efficacy is not patentable.

Issue:

• Whether the subject patent application lacks an inventive step u/s 2(1)(ja) of the Patents Act, 1970

• Whether the subject invention falls under the exclusion of section (d) of the Patent Act, 1970.

Submissions made by the Appellant:

The Appellant's honourable counsel argued that the Respondent's objection, in which it mentioned that the Appellant's Patent application was similar to the closest prior art, failed to clearly and explicitly demonstrate how a person skilled in the art (PSA) would be directed toward the subject of the patent application. The prior art did not include the elements added in the current application, and the compound identified as closest to the prior art significantly enhanced the therapeutic efficacy of the present invention.

Additionally, another objection was raised under Section 3(d) of the Act concerning the efficacy of the subject patent application. The Appellant contended that the Controller failed to identify the known substance in the closest prior art. Furthermore, the Controller overlooked the data presented regarding the enhanced efficacy resulting from the increased oral absorbability of the compound mentioned in the complete specification of the application.

Submissions made by the Respondent:

The Respondent argued that the compounds claimed in the application were structurally similar to those disclosed in the prior art. They contended that the applicant had made only minor modifications to their inventions, failing to distinguish them from the prior art. The changes made were deemed obvious to a person skilled in the art (PSA). Therefore, the claimed inventions did not meet the threshold for an inventive step, as they were considered known to the PSA and closely related to the prior art.

Another objection raised by the Respondent was that the second timed compound constituted a new form of a known substance, which is deemed non-patentable under section 3(d). Furthermore, the claimed compound did not demonstrate any enhanced efficacy over the known substance, as required by section 3(d). As a result of these objections, the Respondent concluded that the subject patent application was non-patentable.

Analysis/Court’s Reasoning:

The first issue before the Court was whether the claimed piperidine compound qualified for patent protection or fell within the exclusion under Section 3(d) of the Patents Act, 1970. Specifically, the Court examined whether the invention was merely a new form of a known substance without demonstrating enhanced efficacy, thereby failing the threshold for patentability under Indian law.

Section 3(d) provides that the following is not an invention if it is -

• Mere discovery of a new form of a known substance that does not result in the enhancement of its known efficacy or

• Mere discovery of any new property or new use of the known substance; or

• Mere discovery of the mere use of a known process, machine or apparatus unless such known process results in a new product.

This definition elaborates on the provision by adding "mere discovery" at the beginning and providing an explanation at the end. The explanation clarifies that salts, esters, polymorphs, metabolites, pure forms, particle sizes, isomers, and other derivatives of known substances are to be considered the same. These forms are expressly excluded from the definition of "invention" under Section 2(1)(j) unless they differ significantly in terms of efficacy.

Given that the patent application had been rejected under both Sections 3(d) and 2(1)(ja), the Court undertook a detailed examination of these provisions. In doing so, it referred to the landmark judgment of Novartis AG v Union of India 13 S.C.R 148, where the question of the patentability of a Novartis Cancer drug was raised. The Supreme Court of India considered the following questions while examining the patent u/s 3(d) -

• What is the interplay between section 2(1)(ja), 2(1)(j) and 3(d) ?

• What is the true import of section 3(d)?

• Does this product qualify as a new invention, involve enhancements from existing substances, and is the invention non-obvious to someone skilled in the field?

The Supreme Court ultimately held that Novartis's modified compound failed to meet the threshold of Section 3(d), reiterating that patent protection may be granted only if a new form of a known substance demonstrates enhanced therapeutic efficacy.

Relying on Novartis, the Delhi High Court reiterated that Section 3(d) bars the patentability of any new form of a known substance unless the claimed invention shows a significant improvement in therapeutic efficacy. In this context, Justice Amit Bansal laid out the following minimum requirements that must be satisfied by the Patent Office to sustain an objection under Section 3(d) -

• The known substance with "known efficacy";

• Clear explanation as to how and why the claimed substance is a derivative or otherwise a new form of a known substance;

• An objective comparison between the therapeutic efficacy of the claimed invention and that of the known substance.

Applying these principles to the present case, the Court found that the Controller had failed to identify a specific "known substance" from prior art D1. Justice Bansal held that an applicant could not be expected to infer the relevant known substance and furnish efficacy data based on vague or broadly framed prior art. Without clear identification, the applicant is denied a fair and reasonable opportunity to respond to the Section 3(d) objection, amounting to a breach of natural Justice.

In light of these findings, the Court concluded that the objection raised u/s 3(d) is flawed and legally unsustainable. Therefore, the Controller was asked to review the application again and ensure it dealt with substantive fairness.

The Court had also discussed whether the claimed invention lacked an inventive step u/s 2(1)(ja) of the act, as was evident to a person skilled in the art. Section 2(1)(ja) of the act defines "inventive step" as a feature of an invention that involves technical advancement, has economic significance, or both, making it non-obvious to a person skilled in the art. The inventive step requirement ensures that the patents granted are novel and non-trivial inventions that can contribute to progress in technology or industry.

This provision was read with section 3(d) of the act because section 2(1)(ja) warrants reconsideration upon proper identification of the "known substance" from the closest prior art for the invention to be novel and not apparent to PSA. In the impugned order, the Controller of Patents dismissed the application based on the claimed compound that did not possess an inventive step based on the prior art D1. The Controller had rejected on the following grounds -

The claimed invention possessed the same basic chemical scaffold (i.e. core structure) as that shown in D1. The modifications to the compound were minor variations made from a narrow range of options already disclosed in the prior art.

Thus, according to the Controller, there was no sufficient non-obviousness or technical advancement. However, the High Court noted that the objection raised u/s 2(1)(ja) was closely related to its objection under Section 3(d). The Court held that since the assessment of inventive steps in the pharmaceutical invention often depends on whether there was enhanced efficacy, it is to be determined u/s 2(1)(ja). Thus, as per Justice Bansal, identifying "known substance" from prior art was equally crucial in assessing the inventive step. Therefore, failure to do that affected the validity of the objection raised by the Controller. The analysis provided by the Court during this judgment underscores that the inventive step in pharmaceutical patents cannot be evaluated in abstract or isolation.

Accordingly, the Court ruled that the objection had to be re-evaluated upon correctly identifying prior art compounds and due consideration of the applicant's data.

Conclusion:

The High Court's decision in Taiho Pharmaceutical Co. Ltd. v. Controller of Patents is a precedent affirming that the procedural and substantive standard must govern patent examinations held by the Controller. The Court noted the need for:

• Clarity in identifying the prior art

• A fair opportunity for the applicant to be heard and

• Scientific rigor in evaluating inventive step and efficacy.

Thus, the Court's reasoning completely aligns with the concept of natural Justice and instructs the Controller to clarify the objections to the Appellant by not keeping them vague. The Court laid down a strong principle while explaining section 3(d) r/w 2(1)(ja) of the patent act in this landmark judgment.