The Calcutta High Court has set aside a patent rejection by India's Controller of Patents for ITC Limited's nicotine aerosol delivery device, establishing important precedent on the limits of public health exceptions in patent law. The decision in ITC Limited v Controller of Patents underscores that patent grants should remain independent of potential commercial restrictions and regulatory concerns.
Patent Application and Initial Rejection
ITC Limited filed patent application no. 685/KOL/2015 for "A Device and method for generating and delivery of a Nicotine Aerosol to a user." The invention involves a non-electronic device designed to chemically generate and deliver aerosols of nicotine salt through a chemical reaction between nicotine and pyruvic acid, distinguishing it from Electronic Nicotine Delivery Systems (ENDS) or traditional e-cigarettes.
The Controller of Patents, Designs & Trademarks rejected the application under Section 3(b) of the Patents Act, 1970, which excludes inventions contrary to public order or morality or those causing serious prejudice to health or the environment. The rejection was based on concerns that granting the patent would impede the Central Government's ability to protect public health.
Procedural Violations and Natural Justice
A critical issue in the case involved procedural fairness. The Controller relied on various documents and statutes that were not cited in the First Examination Report or during hearing proceedings. These included the Indian Council of Medical Research white paper on Electronic Nicotine Delivery Systems, circulars from state governments, online toxicology data from PubChem, and related court judgments.
ITC argued it was denied a fair opportunity to contest the rejection, violating principles of natural justice. The Court agreed with this contention, emphasizing that the decision was based on reliance upon undisclosed documents and statutes, leading to a procedurally flawed outcome.
Court's Interpretation of Section 3(b)
The Calcutta High Court provided important clarification on the application of Section 3(b), which prohibits patentability of inventions whose "primary or intended use or commercial exploitation could be contrary public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment."
The Court emphasized that Section 3(b) should be interpreted based on the intended use of the invention rather than its potential health effects. Additionally, the Court suggested that patentability should not be denied solely due to commercialization restrictions.
Separation of Patent Grant and Commercial Regulation
Drawing on Article 27(2) of the Agreement on Trade Related aspects of Intellectual Property (TRIPS) and Article 4quater of the Paris Convention, the Court established that "a grant of a patent shall not be refused on the ground that the sale of the patented product or of a product obtained by means of a patented process is subject to restrictions and limitations resulting from the domestic law."
The Court reiterated that patents are granted to encourage inventions and to secure that inventions work in India on a commercial scale. Importantly, the Court noted that patents granted do not prohibit the Central Government from taking measures to protect public health, recognizing that regulatory frameworks governing commercialization are distinct from patentability decisions.
Supporting Precedent and Broader Implications
This decision continues a trend established in another recent Calcutta High Court ruling in R J Reynolds Tobacco Company v The Controller General of Patents. In that case, the Court allowed an appeal against a Controller's decision refusing a tobacco-related application under Section 3(b), noting that the conclusion of serious health prejudice was made "without any evidence at all."
The Court flagged concerns about subjective decisions made "without any reasoning or consideration of the scientific evidence or data" submitted by patent applicants.
Parliamentary Concerns and Future Outlook
The decision aligns with concerns previously raised by India's Parliamentary Standing Committee on Commerce in its 161st Report titled "Review of the Intellectual Property Rights Regime in India." The Committee observed that the broad wording of Section 3(b) may lead to arbitrary decisions and refusal of socially useful inventions such as nicotine chewing gums used for smoking cessation or devices that make smoking less hazardous.
The Committee recommended amending Section 3(b) to limit exclusions to inventions barred by law and introduce safeguard mechanisms to prevent arbitrary decisions.
Based on these interpretations, the Calcutta High Court set aside the Controller's order and remanded the matter for reconsideration, providing important guidance for future patent applications involving tobacco or nicotine-related inventions.
