Novartis Decision: Interpretation of “Invention”, “Inventive Step” and Interplay with Section 3(d)

The Novartis decision raises several fundamental questions which quite a few of us have been pondering over for quite some time. For instance, the need for and relevance of definition of “new invention” in Section 2(1)(ta) of the Act. If the definition of invention under Section 2(1)(j) already refers to a “new product or process” which is then governed by “Anticipation” in Chapter VI, where is the need for another term called “new invention”? I’d be grateful if readers could point out any section or rule of the Patents Act other than  Section 2(1)(ta) which uses the term “new invention”.

The Supreme Court has attempted to address some of these issues in its decision. For instance, in Paras 25 and 26, the Court asks thus:

“25. Some important provisions of the Patents Act, 1970, as they stand after the amendment of the Act in 2005, and with which we are especially concerned in this case, indeed present a problem of interpretation. Why was section 5, which, in one sense, was the distinctive feature of the patent law in India, taken off the statute book? What does the legislature wish to say through clauses (j) and (ja) of section 2(1), section 3 and several other sections? How is it that some of the provisions of the Act apparently seem to be of no use or purpose, e.g., sections 2(1)(l) and 2(1)(ta)? Why is it that some of the crucial provisions in the Act appear to be wanting in precision and clarity?

26. It is easy to know why section 5 was deleted but to understand the import of the amendments in clauses (j) and (ja) of section 2(1) and the amendments in section 3 it is necessary to find out the concerns of Parliament, based on the history of the patent law in the country, when it made such basic changes in the Patents Act. What were the issues the legislature was trying to address? What was the mischief Parliament wanted to check and what were the objects it intended to achieve through these amendments?”

Though these questions were raised in Page 14 of the decision, the Hon’ble Court goes on to discuss the entire history of the Indian Patent regime and its tryst with TRIPS until Para 86@Page 50....It is only again in Para 87 that the Court returns to the issue of “invention” and “inventive step”.

In an earlier post titled “Inventive Step under the Patents Act: Where is the Confusion”, I had taken the following view to clear a few prevalent misconceptions about the definition:

“Therefore, inventive step does not refer solely to a “non-obvious technical advance”, but in fact refers to a “non-obvious feature” which involves either a technical advance or has economic significance or both.

...

The other important corollary is that the presence of technical advance is not the sole criterion to judge if an invention has an inventive step. Economic significance of a feature which is non-obvious too by itself could help the product or the process satisfy the “inventive step” requirement. Importantly, the criterion of economic significance is equally applicable to products and processes.”

Following is what the Supreme Court has held in Para 90@Page 52 of its decision:

“90. On a combined reading of causes (j), (ac) and (ja) of section 2(1), in order to qualify as “invention”, a product must, therefore, satisfy the following tests:

(i) It must be “new”;

(ii) It must be “capable of being made or used in an industry”

(iii) It must come into being as a result of an invention which has a feature that:

(a) entails technical advance over existing knowledge;

Or

(b)has an economic significance

And

           (c) makes the invention not obvious to a person skilled in the art.”

Clearly, according to the Supreme Court, a feature which has an economic significance, which feature also makes the invention non-obvious qualifies as “inventive step” under the Patents Act. In other words, it is not just technical advance that qualifies as “inventive step”. The “or” in the definition is meant to distinguish between “technical advance” and “economic significance”. That settles the issue for good...

Relationship Between Section 2(1)(j) and Section 3: “Invention” and “Patentability”

The Supreme Court, in Paras 91 and 92, has taken the view that “invention” and “patentability” are two distinct requirements that a patent application has to satisfy for grant of a patent. The Court has noted that “Something may be an “invention” as the term is generally understood and yet it may not qualify as an “invention” for the purposes of the Act. Further, something may even qualify as an “invention” as defined under the Act and yet may be denied patent for other larger considerations as may be stipulated in the Act.”

With specific reference to the nature of proscriptions under Section 3, the Court observed in Para 92 that “section 3, it puts at one place provisions of two different kinds: one that declares that certain things shall not be deemed to be “inventions” [for instance clauses (d) & (e)]; and the other that provides that, though resulting from invention, something may yet not be granted patent for other considerations [for instance clause (b)]”

Again in Para 181, the Court took the following view:

“181. While dealing with the explanation it must also be kept in mind that each of the different forms mentioned in the explanation have some properties inherent to that form, e.g., solubility to a salt and hygroscopicity to a polymorph. These forms, unless they differ significantly in property with regard to efficacy, are expressly excluded from the definition of “invention”.....(continued)”

In other words, if the subject-matter of a patent application fails to overcome the requirement of Section 3(d), it is not an invention within the meaning of the Act under Section 2(1)(j). Therefore, at least with respect to pharmaceutical substance, Section 3(d) must be used as the first filter before the subject-matter is tested on the anvils of Section 2(1)(j). This was exactly the view taken by the IPAB in the Yahoo decision on Section 3(k), which was as follows:

“Finally we come to the ground of non-patentability under S. 3 (k). If the claimed subject matter is not an invention or if the invention is not patentable or if it is excluded by S.3 of the Act, then none of the other objections need to be considered. Only if the claimed subject matter is a patentable invention we need to look at anticipation, obviousness etc.”

It is another matter that the IPAB itself was inconsistent in the application of this logic in the very same Yahoo decision...

Similarly, in the Novartis decision, having stated clearly in Para 181 that forms of a chemical substance which do not exhibit significantly different efficacy characteristics are “expressly excluded from the definition of invention”, the Supreme Court again blurs this position by stating as follows in Para 192 (read with Para 104):

“192. Section 2(1)(j) defines “invention” to mean, “a new product or …”, but the new product in chemicals and especially pharmaceuticals may not necessarily mean something altogether new or completely unfamiliar or strange or not existing before. It may mean something “different from a recent previous” or “one regarded as better than what went before” or “in addition to another or others of the same kind”. However, in case of chemicals and especially pharmaceuticals if the product for which patent protection is claimed is a new form of a known substance with known efficacy, then the subject product must pass, in addition to clauses (j) and (ja) of section 2(1), the test of enhanced efficacy as provided in section 3(d) read with its explanation”

The above-underscored line gives room for some to say that only after the claimed subject-matter is tested under Section 2(1)(j) and (ja), it must be additionally scrutinized under Section 3(d). In the absence of the above statement, it would have been possible to test the invention first for satisfaction of Section 3(d), and if it failed to overcome the provision, there would be no further need to examine it under Section 2(1)(ja). This would have been better since a Section 3(d) analysis, by its very nature, entails a check for novelty as well.

It remains to be seen how the Patent Office and the IPAB interpret and apply the decision of the Supreme Court in this regard to pharma and chemical applications henceforth.