Long Post Ahead!
The Indian Patent Office has its own jurisprudence regarding nicotine/tobacco-related inventions. Bloggers have earlier noted instances wherein the patent office has rejected nicotine/tobacco-related patent applications as violating Section 3(b) (see here, here and here). While we all were eagerly waiting for the Delhi HC to give its judgement on one such instance, the Calcutta High Court in ITC vs Controller had set aside an order from the Patent Office which had ostensibly refused grant for a nicotine/tobacco-related patent application under Section 3(b). In this post, first, I wish to discuss what led to the appeal, second, how the Court dealt with the appeal and finally, break down Section 3(b) and also understand the specific reasons why the Controller rejected the application and conclude with an analysis of Section 3(b).
What led to the appeal?
ITC had filed for a Patent application titled “A Device and method for generating and delivery of a Nicotine Aerosol to a user” (Application No. 685/KOL/2015). The claims were directed to a device which had two components or chambers which would hold “an aerosol generating substrate (e.g. tobacco, alkaloid, nicotine and the like) and an aerosol promoting substance (e.g. acid), to generate and deliver the aerosol of a nicotine salt to the user.” As the applicant clarified before the High Court, this is not an e-cigarette or ENDS which has electronic components like a battery and atomiser, etc that vaporise the e-liquid to create the aerosol inhaled by the user.
Image from here
Instead, the invention disclosed in the suit patent, without any specific aid of electronic components, is able to generate the nicotine aerosol based on chemical reactions and then deliver the aerosol to the user. The Patent Office in its FER report had raised objections on Section 3(b) (public order, morality and public health) and had merely stated cryptically that the invention is barred by Section 3(b) without any further explanation.
Later in the rejection order, Patent Office marshalled additional documents like ICMR’s report on ENDS, Government regulations, circulars and the Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019 (2019 Act), which had imposed an omnibus ban on e-cigarettes or ENDS to justify its Section 3(b) objection. Notably absent here is its acknowledgement or rebuttal of the distinctive mode in producing the nicotine aerosol in the current invention, and how/if these additional documents would apply to it.
The Court on the Question of Natural Justice:
The Court agreed with the applicant here that the Patent Office cannot surprise the applicant by citing new documents in the final rejection order, which were not raised in the FER. The reasoning here was simple – as the applicant will not be in a position to address the objections raised on the basis of these documents. This applies even to public documents and Acts, since even though the document itself is public, it is impossible for the applicant to know which of the public and Government documents would be relevant to his case unless specifically told so.
The Court on Section 3(b):
The Court’s reasoning up until now would have been sufficient to set aside the order for violation of natural justice, which the Patent Office as a quasi-judicial authority is required to uphold. Yet the Court chose not to stop there and decided to also discuss Section 3(b). The Court this time observed cryptically in Para 37 that “Section 3(b) is the intent principle and not the effect or harm principle.” Later, it proceeded to discuss a PPT presentation of Shri DPS Parmar, who was Assistant Controller until 2003 and later became Deputy Controller after 2003. In his PPT, he provided some illustrative examples of what kind of possible inventions can fall under the ambit of Section 3(b). The Court first pointed out that nicotine/tobacco-related products are not in the examples provided by DPS Parmar and later noted that even the Patent Manual does not include an example which can be remotely connected to nicotine/tobacco-related products.
Finally it discussed Article 27.2 of TRIPS and 4quarter of the Paris Convention (which I had discussed previously in the context of the Philip Morris Appeal and ENDS) and concluded that grant of a patent cannot be rejected solely on the ground its sale has been prohibited in a member country and set aside the order and directed the Patent Office to reexamine the application.
Problems with the judgment:
Unfortunately, the Court’s foray into Section 3(b) was underwhelming to say the least. The first issue with the reasoning of the Court starts at para 37, as the Court did not clarify what it meant by “Section 3(b) is intent principle and not harm or effect principle”. Is the Court referring to the phrase “primary or intended use” that has been used in Section 3(b) when it says Section 3(b) is an intent principle? Yet the section also says “commercial exploitation of which”, which is more intention agnostic and is focused on the effects of the invention. The Patent Office in its rejection order seems to zero in more on the effects than the intention. Is the Court criticising that approach? One can only speculate, as the Court did not explore this line of reasoning.
Secondly, why does the Court treat illustrative lists provided in the PPT and the Patent Manual as exhaustive? In both the PPT and the Patent Manual, the word “example” has been used, so it is meant to be indicative, not exhaustive. Secondly, Section 3(b) itself is broad and has been criticised for the same, the section is drafted in a manner to capture a lot of cases that might not fall in the examples provided. The Court, by judicial fiat, seems to have treated Section 3(b) as an exhaustive list limited to the examples provided in a PPT made by a former Patent Office Official and the list provided in the Patent manual, without providing any specific reasons. Thirdly, why is the Court referring to PPT presentations made by a former Patent Official? The judgment does not mention DPS Parmar being invited as Amicus before the Court. Likewise, the PPT is also referred to in the written submissions of the applicant (pages 17-18) before the Patent Office. Would this explain the appearance of the PPT in the judgment? Likewise, what is the interpretive value of such a document? Why can’t the Court focus on the language in the statute first, rather than on PPTs? I have nothing against DPS Parmar, yet it feels like the Court is taking a shortcut by merely relying on his PPT and thus not exercising its mandate to clarify and interpret the law. This judgment comes on the heels of multiple instances wherein the Courts have criticised and set aside Patent Office orders for being unreasoned.
Fourthly, the Patent Manual, while providing examples under example d) and e), states the following:
Now, the Patent Office had rejected the application, arguing that the invention disclosed would cause serious prejudice to human health. So, irrespective of the strength of the Patent Office’s argument, prima facie, would it not fall under both the examples provided in d) and e)?
Finally, in the tail end of the judgment, the Court observes the following:
So, are the observations made in the judgment orbiter? So, if it is not binding, what is the point of all the substantive discussion on Section 3(b)? Should not the Court then have limited itself to the question of Natural Justice?
Breaking down Section 3(b):
In the context of Section 3(d) and Section 3(i), the Madras High Court has conveniently broken down sub-sections under Section 3 to clarify the analysis. One can do the same to Section 3(b).
A section 3(b) analysis would be as follows:
- Identify the “primary or intended use” of the invention or the manner in which the invention would be “commercially exploited”.
- One then has to determine whether the acts done above would be contrary to “public order” or “morality” or
- whether it would cause “serious prejudice” to “human, animal, plant life or health or to the environment”.
How did the Patent Office apply Section 3(b)?
The application was rejected under the third part or limb of the section, stating that the invention disclosed would cause “serious prejudice” to “human health”. To establish “serious prejudice”, the Patent Office seems to have drawn a functional equivalence between the invention in question and ENDS. Post this, the Patent Office marshalled all the additional documents starting from the ICMR report on ENDS, other government notices and regulations highlighting the Public health threat presented by ENDS and like products.
As to identifying the primary or intended use or manner in which the invention would be commercially exploited, one can look into the complete specifications of the patent application. It recites specific objectives that the invention seeks to achieve, including acting as a smoking cessation product or being used in nicotine replacement therapy (NRT), and it is also intended to mimic traditional cigarettes without burning or heating tobacco. The Patent Office, in its rejection order, did not accept the premise that the invention disclosed can act as a tobacco cessation product or be used in NRT. It cited the ICMR report to argue that ENDS cannot serve as a smoking cessation aid, and hence the suit patent (which it sees as functionally equivalent to ENDS) cannot too. Since it rejected the basic/primary objective of the invention, which was to act as a smoking cessation product or to be used in NRT, it automatically follows at least from the Patent Office’s point of view that the primary or intended use or commercial exploitation of the application will lead to “serious prejudice” to health.
Regulatory power bestowed by Section 3(b):
Namratha had earlier pointed out that an overly broad Section 3(b) gives the Patent Office regulatory power over the Tobacco Industry. Adarsh Ramanujan in his book, had also argued that the Patent Office has regularly hit nicotine/tobacco-related patents with Section 3(b). Yet interestingly, the applicants in their written submissions had shown that the Patent Office has not been consistent in this approach, wherein they have also granted patents for nicotine/tobacco-related inventions. Thus, if the claim of the applicant is true, then the Patent Office is inconsistent in its application of Section 3(b) to nicotine/tobacco-related inventions.
Likewise, there is also an additional issue wherein there is no consensus on how harmful ENDS and like products are. I had previously discussed how there is a lot of debate on this front, with arguments for both in favour of a complete ban and for a more regulated approach, eschewing a complete ban. In a recent paper, Gowda and Thangiah have argued for a regulatory approach (in complete contrast to ICMR, which had sought a ban on ENDS and like products) towards these new smoking devices, with regular collection of scientific evidence for calibrating and tweaking the regulation towards greater harm reduction. Thus, one wonders, is the Patent Office taking decisions on matters that are beyond its expertise? Is the Patent Office also exercising regulatory powers over the tobacco industry by deciding on how and when to grant patents? What are the effects of these decisions on the innovation and adoption of smoking/nicotine devices that have the potential to reduce harm to their users by players in the industry?
I wish to thank Swaraj for his inputs!