India's IPAB highlights importance of due process when reviewing patent applications

A friend from Kerala, the state with the highest literacy rate and life expectancy in India, reported news of two recent orders issued by the Intellectual Property Appellate Board (IPAB), which set aside a couple of decisions of the Assistant Controller of Patents & Designs. Interestingly, the IPAB found that, in both cases, the Assistant Controller failed to provide the patent applicant with a fair review of its application, either issuing a cryptic, non-speaking, and vague response, or violating the 'Principle of Natural Justice'.

In the first decision (no. 8/2014), the IPAB reviewed the Assistant Controller's rejection of a patent application filed in 2006 by Schering Co. The application claimed the crystalline polymorph of a bisulfate salt of a thrombin receptor antagonist (Vorapaxar), used for the treatment of acute coronary syndrome chest pain caused by coronary artery disease (for more information, see this post at SpicyIP). The Assistant Controller rejected the application for lack of inventive step, under Section 2(1)(ja) of the Patents Act, adding that the applicant had failed to provide evidence of enhanced therapeutic efficacy, as required by Section 3(d) of the Patents Act (widely discussed after the Novartis judgment, and also commented on a previous PatLit post). Schering appealed the rejection, alleging that the Assistant Controller failed (i) to take into account the arguments raised by the applicant, and (ii) to state the reasons for the contested decision.

The IPAB observed that, under Section 15 of the Patents Act, 'the learned Controller ought not to have mechanically refused the application and on the other hand he could have exercised discretion to give opportunity to the applicant/appellant by making amendments in the application' (and later deciding whether to accept or reject the amended application). According to the board, the Assistant Controller issued a 'cryptic and non-speaking order', which failed to take into account all the arguments raised by the patent applicant. Similarly, when assessing the lack of inventive step, 'the Controller has given a very bald and vague reason without going into the details of the entire document'. Setting aside the contested decision, the IPAB remanded the matter to the Assistant Controller, bound to 'consider the matter afresh by affording sufficient reasonable opportunity to the applicant/appellant to substantiate their claims'.

In the second decision (no. 9/2014), the IPAB examined the Assistant Controller's rejection (see also here) of the application filed by Abraxis BioScience LLC in 2005 (no. 2899/DELNP/2005 - here), which claimed a pharmaceutical composition consisting of (i) a pharmaceutical agent (including, in particular, propofol, paclitaxel, or docetaxel), and (ii) a pharmaceutically acceptable carrier, comprising deferoxamine, to inhibit microbial growth, and a protein such as albumin, to reduce side effects. The applicant challenged the rejection, maintaining that the Assistant Controller unlawfully refused to provide Abraxis with an opportunity to be heard before taking a final decision, violating Section 14 of the Patents Act. Such violation, according to the applicant, determined a violation of the Principle of Natural Justice, as Abraxis was deprived of its right to immediately appeal a decision issued under Sections 14 and 15 of the Patents Act. A further argument concerned the conduct of the Assistant Controller in the pre-grant opposition proceeding initiated by a third party: the patent applicant submitted that the Assistant Controller unlawfully examined an additional ground of opposition ('insufficiency', under Section 25(1)(g) of the Patents Act) which had not been raised by any of the parties involved in the proceeding, thus committing a serious error of law.

The Intellectual Property Appellate Board held that '[t]he reading of the [...] provision [of Section 14] makes it crystal clear that the above said provision contemplates of an opportunity of hearing and as such the said provision is mandatory but unfortunately in the instant case such a mandatory requirement of affording opportunity to be heard was denied to the appellant'. According to a previous judgment of the High Court of Delhi, which the board considered to be 'squarely applicable to the facts of the instant case', the provision at issue 'casts a duty on the controller to give a hearing to an applicant, before exercising any discretionary power, which was likely to affect an applicant for a patent adversely'. The IPAB added that, as an order under Sections 14 and 15 is indeed appealable (while a decision rendered in a pre-grant opposition proceeding, under Section 25, may not be equally appealable, or may force the applicant to defer its appeal), Abraxis was deprived of its right to appeal the adverse order. For these reasons, the board concluded that the Assistant Controller passed the contested decision 'in flagrant violation of the Principle of Natural Justice'.

The second argument raised by Abraxis was also upheld. Reciting previous case law, the IPAB noted that '[w]hen the facts necessary to make out a particular claim, or to seek a particular relief, are not found in the plaint, the Court cannot focus the attention of the parties, or its own attention on that claim or relief, by framing an appropriate issue'. Thus, the Assistant Controller erred in extending the perimeter of its review to an argument which had not been raised by any of the parties.