Pre-Grant Opponents Have Limited Role in Patent Amendment Process, Delhi High Court Rules

New Delhi: In a significant ruling clarifying the scope of participation for pre-grant opponents in patent prosecution, the Delhi High Court, through a Division Bench of Justices Yashwant Varma and Dharmesh Sharma , has held that pre-grant opponents do not have a right to be heard on amendments directed by the Controller of Patents during the examination process.

The judgment, delivered in a Letters Patent Appeal (LPA 50/2023) filed by Novartis AG against Natco Pharma Limited and the Controller of Patents, overturned a Single Judge's decision that had accepted Natco 's contention that pre-grant opposition and examination proceedings merge, requiring opponents to be heard on all amendments, including those directed by the Controller.

Case Background: A Patent Application's Long Journey

The dispute centered on Indian Patent Application No. IN414518 filed by Novartis, which originated from a PCT application in 2006. The application was published in 2007, inviting pre-grant oppositions (PGOs). Over the years, multiple PGOs were filed by various parties, including Natco and the Indian Pharmaceutical Alliance, leading to protracted proceedings.

The application faced several rounds of examination and hearings, spanning over 16 years. In the final stages, after hearings on most PGOs concluded in November 2022, the Controller of Patents issued a notice under Section 14 of the Patents Act, 1970, directing Novartis to carry out certain amendments based on the examination report. Novartis submitted amended claims, and the patent was subsequently granted in December 2022 without providing a further hearing opportunity to the opponents on these Controller-directed amendments.

Natco challenged the grant before a Single Judge of the Delhi High Court, arguing that the Controller's order allowing amendments without hearing the pre-grant opponents violated principles of natural justice and the scheme of the Patents Act, particularly Section 25(1) and Rule 55. The Single Judge accepted this argument, holding that examination and opposition proceedings merge, necessitating opponent participation in amendment discussions. This led to Novartis's appeal.

Key Legal Question: Extent of Opponent's Engagement

The central question before the Division Bench was the extent of engagement of a pre-grant opponent under the Patents Act, 1970, in the course of proceedings initiated by the Controller requiring the applicant to amend the application or specifications.

Arguments Presented

Novartis (Appellant): Represented by Mr. Hemant Singh, Novartis argued that the Single Judge erred by failing to distinguish between the 'examination procedure' (Sections 12-15, Rules 24B, 28, 28A) and the 'opposition procedure' (Section 25(1), Rule 55). They contended that pre-grant opposition merely 'aids the examination' process but does not merge with it. The examination is an independent statutory duty of the Controller.

Novartis stressed that Section 57(6) of the Act specifically provides that amendments to comply with Controller's directions issued before grant are distinct from voluntary amendments (Section 57(1)) and are not subject to the opposition procedure outlined in Section 57(4). They highlighted the potential for abuse of the PGO mechanism through "serial oppositions" to cause inordinate delays, pointing to the 16-year pendency of their application. Novartis also argued that the remedy of post-grant opposition under Section 25(2) and the lack of an appeal against pre-grant opposition rejection (Section 117A) demonstrate the Legislature's intent to limit opponent rights at the pre-grant stage.

Natco & Interveners (Respondents): Mr. J. Sai Deepak for Natco and Mr. Rajiv Nayar for Indian Pharmaceutical Alliance argued that once a pre-grant opposition is filed, the process becomes adversarial, and opponents should be involved at every stage, including amendments directed by the Controller. They contended that the distinction between voluntary and directed amendments is artificial and that the Controller's satisfaction regarding amendments often relies on information arising from the opposition.

They emphasized the lack of an appeal right against pre-grant opposition rejection under Section 117A, suggesting this necessitates a robust participatory role for opponents before grant. They cited previous judgments and reports (e.g., Neon Laboratories, Best Agrolife, Ayyangar Committee Report) to support the idea that opponents must be heard on all amendments.

Court's Analysis and Reasoning

The Division Bench meticulously examined the statutory framework, including the changes introduced by the 2002 and 2005 amendments to the Patents Act.

The Court firmly rejected the Single Judge's "merger" theory, holding that the examination process (Chapter IV) and the opposition process (Chapter V) are distinct.

> "We are thus of the firm opinion that notwithstanding the invitation of objections, the Controller has to be independently satisfied that the application merits acceptance. This independence is vital to uphold the credibility of the patent system ensuring that decisions are made impartially, based on the merits of the application rather than external and interested influences. The Court thus finds itself unable to sustain the theory of merger as advocated on behalf of the respondents..."

The Bench reiterated that pre-grant opposition is merely "in aid of the examination," facilitating a broader perspective for the Controller, but it is not an adversarial process like post-grant opposition.

> "Snehlata C. Gupte correctly understood oppositions to grant as facilitating the Controller in the examination of the patent application. The opposition to the grant thus fosters and stimulates a broader consideration of the patent application."

Regarding amendments, the Court highlighted the significance of Section 57(6), which carves out amendments made to comply with the Controller's directions from the procedure under Section 57(1) and (4). Section 57(4) mandates a hearing for persons interested opposing voluntary amendments, but Section 57(6) indicates that amendments directed by the Controller are distinct and do not automatically trigger the same opposition process.

> "An amendment proposed by the applicant in order to comply with a directive of the Controller is placed on a pedestal distinct from any voluntary amendment that the applicant may choose to introduce. Section 57(6) thus not only liberates the applicant from the rigours of contestation which follows amendments proposed at its discretion, it additionally highlights the intent of the statute to draw a clear line of distinction between amendments traceable to Section 57(1) and those covered by sub-section (6)."

The Court clarified that the hearing contemplated under Rule 55(5) is confined to the representations filed on the specific grounds listed in Section 25(1), not the entire examination process.

The Bench also referred to comparative patent laws in the UK and under the European Patent Convention, noting that third parties making observations (akin to PGOs) are explicitly stated not to become parties to the examination proceedings.

The Court acknowledged the delay concerns and cautioned against the abuse of the pre-grant opposition route to stall the grant process, emphasizing the legislative mandate for expeditious disposal under Section 43(1). It also pointed out that adequate safeguards for 'persons interested' exist in the form of post-grant opposition under Section 25(2).

The Court distinguished the precedents cited by the respondents (Neon Laboratories, Best Agrolife) as primarily dealing with voluntary amendments sought by the applicant, not amendments directed by the Controller, which were the subject of the present appeal.

Decision and Implications

The Delhi High Court allowed the appeal, setting aside the Single Judge's judgment. The Court clarified that pre-grant opponents are not entitled to a hearing on amendments directed by the Controller under Section 15 or Section 14 during the examination phase, as these are distinct from voluntary amendments made by the applicant.

The judgment provides much-needed clarity on the boundaries between the patent examination process and the pre-grant opposition procedure in India. It underscores that while PGOs are valuable inputs, they do not grant opponents the right to participate in every step of the Controller's independent examination and directive power, particularly concerning amendments necessitated by that examination. This ruling is expected to help streamline the patent prosecution process by preventing potential delays caused by opponents seeking audience on Controller-initiated requirements.

The Court, however, clarified that its decision does not affect the rights of 'persons interested' to file post-grant opposition under Section 25(2) and did not rule on the merits of the patent grant itself.