Can the Patent Office reject a patent application on one ground and decline to analyse the rest in the name of efficiency? Using the Bombay High Court’s ruling in JFC Steel Corporation v. Controller of Patents & Designs, Priyam explores the limits of judicial economy in rejection orders, along with issues relating to insufficient disclosure and foreign prosecution history. Priyam is a 3rd-year student at the National Law School of India University, Bengaluru. He is interested in contemporary discussions surrounding intellectual property and criminal law.
Sufficiency of Disclosure and Patent Rejections
By Priyam Mitra
Readers of the blog must be aware that there has been constant discussion here about the lack of reasoned orders at the IPO and the subsequent setting aside by the High Courts sitting in appeal (see recent examples here and here). The recent order of the Bombay High Court in JFC Steel Corporation v The Controller of Patents & Designs adds to this growing pattern of pushbacks from the High Courts. Further, the case has important lessons on a) rejection of a patent on the sole ground of insufficient disclosure and b) consideration of the status of the patent in foreign jurisdictions, which will be discussed in the post.
Judicial Economy in Rejection Orders u/s 15
The case of JFC Steel Corporation concerns an application related to a high strength cold rolled steel sheet which entered the national phase on May 11, 2015, and claimed priority from a Japanese application dated December 18, 2012. The First Examination Report (FER) was issued in 2019 and the objections related to novelty, inventive step, non-patentability and insufficient disclosure under S.10(4) of the Patents Act 1970. A reply to the FER was filed and a hearing was held in September 2022 under S.14. The post-hearing response of the applicant maintained that the objections on the grounds of novelty and disclosure were ill-founded, and the applicant thus failed to introduce amendments to conform to these objections. In January 2023, the Assistant Controller of Patents and Designs rejected the application u/s 15 of the Act. The reasoning provided is limited to the objection u/s 10(4) and the order mentions that since a single ground is enough for refusal, it was unnecessary to “take any explicit opinion on prior claiming, novelty / inventive step”.
It is in this light that the appeal came to the Bombay HC. In a brief order, the SB relies on Hemant Karamchand Rohera v. Controller General of Patents to hold that an order without substantive analysis of novelty and inventive step would have to be set aside. The Court in Hemant, relying on Coca-Cola Company v. Controller of Patents and Titan Umreifungstechnik GmbH v. Assistant Controller of Patents, stated (¶21(c)), “a speaking and reasoned order […] must at the very least set out (i) the existing state of knowledge or the specific prior art relied upon; (ii) how the claimed invention is mapped to, or distinguished from, such prior art; and (iii) why, in light of that prior art and the material on record, the claimed invention is found to lack inventive step, sufficiency of disclosure, or other statutory requirements.”
Judicial Economy?
It may appear at first glance that the approach of the Controller here was merely efficient for an already overburdened patent office (see here and here), as a rejection on the ground of insufficient disclosure should be sufficient for rejection (more details below). Tejaswini Kaushal analyses how this argument at the High Court level is susceptible to concerns of natural justice and unnecessary delays when cases are remanded for fresh adjudication. A similar argument of efficiency could be raised in defense of the Controller as well. However, this is easily rebuttable when the role of the patent office as “a court of first instance” is looked at (see here and here). It has been held that the IPO has all the “trappings of a court” and is the sole authority designated for fact-finding. The assertion of judicial economy here is thus misplaced, as appellate courts rely on these orders, and unreasoned or incomplete orders constrain the Courts from deliberating on all relevant contentions. The Courts have thus often reprimanded IPO for not issuing reasoned orders (see here). The applicant, too, is left in the dark when they are unable to know whether other arguments of theirs would have been sustained otherwise. Bharathwaj Ramakrishnan argues that a checklist of what is considered a reasoned order is updated every time the court sets aside an order for being unreasoned. As established by recent cases and followed in JFC Steel, an order that does not consider all relevant grounds while rejecting an application will thus not survive scrutiny.
Whether a Rejection on the Sole Ground of Non-Disclosure Alone Can Stand
A recent order by the Controller in a pre-grant proceeding rejects the application on the basis of insufficient disclosure (S.25(1)(g) while clearing the challenge of novelty, inventive step, and subject matter patentability. Unlike the JFC case, the Controller reasons through each ground and then reaches the conclusion. This raises the question of whether a rejection on the sole basis of insufficient disclosure be upheld when the application clears all other substantive grounds. Why this becomes cloudy is because of an obiter in JFC Steel at ¶5. The counsel for the applicant argued that “rejection of a patent application solely on the ground of Section 10(4) is unsustainable in law”. However, the cases that are cited in support of this assertion do not state this verbatim, and it must be noted that while the SB in the next para states that “I find merit in the aforesaid submission”, later he goes on to say, “Thus, in the absence of any findings on the aspect of lack of novelty or inventive step, the Impugned Order would have to be set aside”. This makes it clear that it is the absence of analysis of novelty and inventive step, that the Court sets aside the order here and not the rejection on the sole basis of insufficient disclosure. It must be remembered that, as Swaraj and Praharsh explain (here), a core tenet of patent law is the principle of quid pro quo that requires a patentee, in return for the monopoly provided, to disclose the invention in the specified clear terms so that society at large benefits from it after the expiry of the monopoly period.
Another important reason supporting this rejection is the processes that are typically followed by the patent office. As the JFC case shows, the applicant is given multiple opportunities under Sections 14, 15 and Rules 28, 28A, and 129 of the Patent Rules 2003 (updated from time to time). If the applicant fails to amend the application in the face of objections by the examiner, it might hint towards the fact that the amendment does not fall into the contours of Section 59, i.e., “disclaimer, correction or explanation” (see here and here for more inquiry of amendments). In such a case, then, again, a rejection is warranted on this ground alone so long as the order has sufficient reasoning for the grounds of novelty, inventive step etc.
Conclusion
There is an important observation by the Court in the JFC case when it states that the controller should consider the fact that the same invention has been granted in foreign jurisdictions because they have similar disclosure requirements. It must be noted that the applicant in this case specifically stated foreign prosecution history in their replies. It does seem like the Court is suggesting that the absence of any consideration of this aspect further underscores the inadequacy of the reasoning in the impugned order. Even though the order of the Controller was passed before the Patent amendment rules were enacted, this once again illuminates the importance of foreign prosecution. But this has to be seen against the recent amendment, which removes the burden of the applicant to bring this to the notice of the Controller (see here and here). An overworked IPO is further burdened with this obligation. Unsurprisingly, for unreasoned orders too, the workload of the IPO is considered a major contributing factor. It has been argued that performance metrics do not help in reducing this workload and thus, as has been suggested in previous posts (see here and here), broad changes are required in the IPO.
I would like to thank Swaraj and Bharathwaj for their insights.
