Court’s Decision
The Delhi High Court (Division Bench of Justice C. Hari Shankar and Justice Ajay Digpaul) set aside the orders of the Assistant Controller of Patents and the Single Judge rejecting a process patent for recovery of potassium sulphate and other by-products from distillery effluents (spent wash) under the Patents Act, 1970.
The Court held that the Controller’s findings were “laconic and legally unsustainable”, as he had simultaneously accepted novelty under Section 25(1)(b) but denied inventive step under Section 25(1)(e) — a logically inconsistent conclusion.
“If the prior art documents do not disclose all the features of the invention, the finding that the invention lacks inventive step over those very documents cannot stand.”
Accordingly, the Court remanded the matter to the Controller General of Patents, Designs and Trade Marks (CGPDTM) for a fresh, reasoned decision after re-examining the objections under Sections 3(d) and 25(1)(e) of the Patents Act.
Facts
The appellant, an inventor in the field of environmental engineering, filed a patent application for a “process for recovery of potassium sulphate and other valuable products from spent wash leading to a Zero Liquid Discharge (ZLD) system.”
The process involved multiple chemical steps: treating distillery effluents with acid, filtration, evaporation, thermal decomposition, dissolution, and crystallisation to recover potassium sulphate, magnesium sulphate, activated carbon, and reusable water.
A pre-grant opposition was filed by the Council of Scientific and Industrial Research (CSIR) under clauses (b), (e), (f), and (g) of Section 25(1), alleging lack of novelty, obviousness, and non-patentability under Section 3(d).
The Assistant Controller (AC) rejected objections under Sections 25(1)(b) and 25(1)(g), but upheld objections under Section 25(1)(e) (lack of inventive step) and Section 25(1)(f) read with 3(d) (mere use of known processes). The patent application was thus refused.
The Single Judge upheld this rejection, prompting the appeal before the Division Bench.
Issues
- Whether the Controller’s findings rejecting the patent for lack of inventive step and under Section 3(d) were legally sustainable.
- Whether a patent can be denied for lack of inventive step when novelty has already been acknowledged.
- Whether the reasoning in the orders of the Controller and Single Judge satisfied the requirement of a reasoned quasi-judicial order under the Patents Act.
Petitioner’s Arguments
The appellant argued that the Controller’s findings were contradictory, as he had expressly held that the prior art documents D1 (US Patent 20180257945) and D2 (BIS Guide IS:8032-1976) did not disclose all features of the claimed invention, yet concluded that it lacked an inventive step in view of the same documents.
The petitioner contended that the invention introduced a technically superior, ZLD process, addressing shortcomings in existing potash recovery systems. Unlike prior art methods which involved incineration and generated effluents, the claimed process recovered multiple usable by-products and achieved complete water reuse — an industrial and environmental advancement.
It was submitted that Section 3(d) had been wrongly invoked, as it applies only to new forms of known substances or use of known processes without new products or reactants, whereas the invention was a novel process employing a unique sequence of operations with distinct outcomes.
The appellant emphasized that no motivation existed for a skilled person to combine the contradictory teachings of D1 and D2. Both dealt with divergent methodologies — D1 avoided burning of spent wash to recover organics, while D2 recommended incineration, making any combination artificial and hindsight-based.
Respondent’s Arguments
The CSIR and Controller’s counsel maintained that the claimed process merely aggregated known steps — acidification, evaporation, decomposition, dissolution, and crystallisation — and hence did not involve any inventive step under Section 2(1)(ja).
They argued that both D1 and D2 already described potassium recovery from spent wash, and the claimed method added no new reactant or novel outcome. The respondents relied on the Supreme Court’s test in KSR International Co. v. Teleflex Inc. and the Delhi High Court’s decision in F. Hoffmann-La Roche v. Cipla Ltd. (2016) to argue that mere optimization of existing techniques cannot confer inventiveness.
Further, they contended that since the final product was the same (potassium sulphate), and no new reactant was used, the invention was hit by Section 3(d) as a mere use of known processes yielding known products.
Analysis of the Law
The Court elaborated that Sections 2(1)(ja), 3(d), and 25(1)(e) of the Patents Act collectively establish the criteria of inventive step, novelty, and patentability.
While Section 25(1)(b) concerns lack of novelty, Section 25(1)(e) addresses inventive step — requiring a showing of technical advance or economic significance. A finding of novelty automatically presupposes that the claimed invention is not wholly disclosed by prior art, and thus, the same prior art cannot simultaneously render it obvious without a clear rationale.
The Bench criticized the “rule of thumb” approach prevalent in patent examinations:
“In the absence of statutory guidelines, Examiners often decide applications and oppositions on subjective opinion, leading to arbitrary outcomes. The present case is a classic illustration of the perniciousness of such a system.”
The Court reiterated that reasoned decision-making is essential in patent adjudication, as it ensures transparency, prevents arbitrariness, and aids judicial review.
Precedent Analysis
- F. Hoffmann-La Roche Ltd. v. Cipla Ltd. (2016) 65 PTC 1 (Del):
Established the five-step test to determine inventive step — identifying the skilled person, inventive concept, differences from prior art, and whether such differences would be obvious.
Reaffirmed here to highlight that the Controller must apply this framework instead of vague reasoning. - Avery Dennison Corp. v. Controller of Patents (2023) 93 PTC 26:
Warned against “hindsight reconstruction” when combining prior art references.
Cited to show that the Controller failed to justify why a skilled person would combine D1 and D2. - D.S. Biopharma Ltd. v. Controller of Patents (2022 SCC OnLine Del 3211):
Held that patent rejection under Section 3(d) must clearly identify the known substance or process being compared.
Applied to stress the Controller’s failure to specify how Section 3(d) applied to a process patent. - Catalysts & Chemicals India v. Imperial Chemical (1976 IPLR 84):
Recognized that a novel combination of known steps can itself constitute an invention.
Relied upon by the appellant to argue that the unique sequencing of steps achieved ZLD and resource recovery.
Court’s Reasoning
The Division Bench held that both the Controller and the Single Judge erred in law by conflating novelty and inventive step, leading to self-contradictory conclusions. Once the Controller acknowledged that D1 and D2 did not disclose all features of the invention, he could not have simultaneously found the invention obvious based on the same documents.
“If the entire claim is not anticipated, it cannot be said to be obvious unless the reasoning demonstrates how a skilled person would inevitably arrive at the same combination without inventive input.”
The Court also found that the Controller’s reasoning under Section 3(d) was mechanical. Section 3(d) primarily concerns discoveries of new forms of known substances, and its extension to process patents must be accompanied by clear findings on new reactants or new products, which were absent.
The Bench emphasized that each statutory ground of opposition must be adjudicated independently, and that lack of detailed analysis or mere reproduction of an opponent’s submission cannot substitute for judicial reasoning.
Consequently, the impugned orders were set aside, and the matter was remanded for reconsideration by the Patent Office, directing it to pass a fresh, reasoned, and speaking order within a stipulated time.
Conclusion
The Delhi High Court quashed the rejection of the patent application, holding that the Controller and Single Judge had failed to apply the correct tests for inventive step and Section 3(d).
The Court directed that the Controller General of Patents re-examine the application with independent findings on:
- Whether the claimed process involves a technical advance or economic significance;
- Whether the objections under Section 3(d) apply to a process-based invention; and
- Whether the combination of prior art references logically leads to the claimed process.
This order restored the appellant’s opportunity for a fair hearing and reaffirmed the judiciary’s role in ensuring reasoned, transparent patent adjudication.
Implications
This judgment strengthens procedural integrity in Indian patent examination by clarifying that:
- Novelty and inventive step cannot be conflated; a finding of novelty precludes mechanical rejection for obviousness.
- Section 3(d) must be applied narrowly and with reasoning specific to the invention’s nature (product vs. process).
- Patent authorities must adopt the Hoffmann-La Roche test and provide detailed, reasoned findings, avoiding generic conclusions.
It sets a precedent for scientific accountability in the Patent Office and greater protection for innovations in environmental and process technologies.
FAQs
1. Can an invention be both novel and obvious?
No. If prior art does not disclose all features of an invention (making it novel), it cannot be deemed obvious without detailed reasoning explaining why a skilled person would arrive at the same invention.
2. Does Section 3(d) apply to process patents?
Only if the process merely uses known steps to yield known products without any new reactant or technical advancement. Courts require detailed justification before extending Section 3(d) to process claims.
3. What happens when patent authorities issue unreasoned orders?
Such orders are liable to be set aside as arbitrary. The Patent Office must record detailed findings on each objection, backed by evidence and legal reasoning.