This landmark case delves into the procedural intricacies of pre-grant opposition under the Indian Patents Act, 1970, with a focus on the Controller's authority to amend patent claims and the corresponding rights of pre-grant opponents. The case underscores the delicate balance between protecting patentees' rights and ensuring procedural fairness for opponents, particularly in a rapidly evolving and competitive pharmaceutical landscape.

Introduction:
The case revolves around a fundamental question: to what extent should pre-grant opponents be involved during the examination and amendment process of a patent application? It arises from a decision by the Controller of Patents, where amendments to Novartis AG's patent application were approved without notifying or consulting pre-grant opponents, including Natco Pharma. The Single Judge ruled in favor of Natco, asserting that such actions violated principles of natural justice. This appeal challenges that decision, bringing to light critical issues in patent law, administrative fairness, and industrial implications.

Background:
Novartis AG, a global pharmaceutical leader, filed an Indian national phase application under the Patent Cooperation Treaty (PCT) on June 8, 2007, claiming priority from a PCT application dated November 8, 2006. The application, published on August 24, 2007, faced numerous pre-grant oppositions over the years, significantly delaying the grant process.

This case exemplifies the challenges posed by India's pre-grant opposition mechanism, where procedural delays and multiple objections can prolong the patent grant process, affecting the commercial viability of innovations.

Brief Facts of the Case:
Case Summary

Timeline of Events:

• 2006-2007: Novartis filed its application (No. 4412/DELNP/2007), which was published, inviting pre-grant oppositions.
• 2015-2022: Ten pre-grant oppositions were filed by various parties, including Natco Pharma, Indian Pharmaceutical Alliance, and others. Hearings were frequently adjourned due to procedural complexities, requests for cross-examinations, and delays in the examination process.
• 2022: The Controller directed amendments to the claims, which Novartis complied with. The patent was granted on December 14, 2022.
   

Natco's Challenge:

• Natco Pharma contended that the Controller failed to notify them of amendments made to the claims during the examination process.
• They argued that this deprived them of a fair opportunity to oppose the revised claims, constituting a violation of natural justice.
   

Single Judge Decision:

• The Single Judge set aside the Controller's decision, holding that procedural lapses, including the failure to involve pre-grant opponents in the amendment process, warranted intervention.
• The judgment emphasized the importance of transparency and procedural fairness in patent prosecution.
   

Issues Involved:

1. Right to Be Heard: Do pre-grant opponents have a statutory or procedural right to be heard regarding amendments to patent claims during the examination process?
2. Violation of Natural Justice: Did the Controller's actions, particularly the approval of amendments without notifying pre-grant opponents, breach principles of natural justice?
3. Balancing Interests: How should the patent system balance the need for expeditious patent grants with the procedural rights of pre-grant opponents?
4. Legislative Intent: Does the current framework under the Patents Act, 1970, provide sufficient clarity on the roles and rights of pre-grant opponents during amendments?
    

Submissions of the Parties:

Novartis AG:

• Delays Caused by Oppositions: Novartis highlighted that the serial filing of pre-grant oppositions significantly delayed the patent grant process, undermining the legislative intent of Section 43 of the Patents Act, which mandates expeditious patent grants.
• Impact on Patent Term: Novartis argued that 16 out of the 20 years of the patent's term were consumed in prosecution, leaving only a limited period for commercial exploitation.
• Compliance with Directions: The company maintained that the amendments were made as per the Controller's directions and did not necessitate fresh rounds of opposition.

Natco Pharma:
Interconnection of Processes:
Natco contended that pre-grant opposition and examination processes are intertwined, and opponents must be involved in decisions regarding amendments to ensure procedural fairness.

Denial of Opportunity:
The company argued that the Controller's failure to notify them of the amendments deprived them of a fair chance to contest the revised claims, violating principles of natural justice.

Reasoning and Analysis by the Court:

• Role of Pre-Grant Opponents: The court recognized that pre-grant opposition serves as a critical mechanism to ensure the validity and robustness of granted patents. It allows third parties to raise objections on statutory grounds, thereby safeguarding public interest.
   
• Principles of Natural Justice: The court emphasized the importance of adhering to principles of natural justice, particularly transparency and fairness. It held that the Controller's failure to notify pre-grant opponents of amendments and provide them with an opportunity to respond constituted a procedural lapse.
   
• Balancing Competing Interests: The court acknowledged the need to balance the rights of pre-grant opponents with the objective of timely patent grants. While opponents play a vital role in ensuring patent quality, prolonged delays in the grant process can undermine the commercial viability of patents and discourage innovation.
   
• Critique of Single Judge's Decision: The Division Bench critiqued the Single Judge's decision for overextending the procedural rights of pre-grant opponents. It noted that excessive procedural requirements could disrupt the legislative framework for patent grants, leading to inefficiencies.
   
• Legislative Intent and Procedural Safeguards: The court examined the legislative intent behind the Patents Act, noting that while pre-grant opposition is intended to be a tool for ensuring robust examination, it should not be misused to delay patent grants.

Decision:

The Division Bench set aside the Single Judge's order and reinstated the Controller's decision to grant the patent. It provided guidelines to ensure procedural fairness in future cases, emphasizing the need for timely communication of amendments and resolution of objections without compromising the efficiency of the patent prosecution process. Conclusion:
This case underscores the tension between procedural fairness and the efficient functioning of the patent system. It highlights the necessity for clear procedural safeguards to prevent delays while ensuring that the rights of all stakeholders are respected. The judgment serves as a critical precedent in shaping the balance between administrative efficiency and the procedural rights of opponents in India's patent system.

Implications for the Industry:

• For Patent Applicants:
  • Encourages applicants to adopt efficient prosecution strategies to mitigate delays caused by serial oppositions.
  • Reinforces the importance of adhering to procedural requirements to safeguard granted patents from future challenges.
• For Pre-Grant Opponents:
  • Affirms their role in ensuring the robustness of granted patents.
  • Clarifies procedural boundaries to prevent misuse of the opposition mechanism.
• For the Regulatory Framework:
  • Calls for amendments to streamline the opposition and amendment processes.
  • Highlights the need for clear timelines and procedural safeguards to balance competing interests effectively.

Supplementary Inputs:

• Global Perspective: The court's observations align with international practices, where pre-grant opposition systems aim to strike a balance between innovation and public interest.
• Future Reforms: The case underscores the need for legislative amendments to address ambiguities in the Patents Act, particularly concerning the roles and rights of pre-grant opponents.
• Industrial Impact: The judgment sets a precedent for pharmaceutical and biotech industries, emphasizing the importance of procedural clarity in safeguarding innovations while preventing misuse of opposition mechanisms.

Case Title:Novartis AG vs. Natco Pharma Limited & Anr.
Date of Order: January 9, 2024
Case Number: LPA 50/2023
Neutral Citation: 2024:DHC:84:DB
Court: High Court of Delhi, New Delhi
Coram: Hon'ble Mr. Justice Yashwant Varma and Hon'ble Mr. Justice Dharmesh Sharma

Disclaimer:
The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539