NEC Corporation v. Assistant Controller of Patents and Designs

High Court of Delhi at New Delhi, Single Judge | Date of Decision: 28 March, 2026 Case Number: C.A.(COMM.IPD-PAT) 486/2022 Bench: Hon’ble Mr. Justice Tejas Karia

BACKGROUND

The Appellant, NEC Corporation, is the applicant for Patent Application No. 201717010986, filed on 28.03.2017 before the Patent Office, New Delhi as a National Phase Application of PCT Application No. PCT/JP2015/004037 (filed 12.08.2015), which in turn claimed priority from Japan Patent Application No. 2014-204392 (filed 15.10.2014). The application, titled “VIDEO CODING DEVICE, VIDEO DECODING DEVICE, VIDEO CODING METHOD, VIDEO DECODING METHOD AND PROGRAM,” relates to video coding/decoding devices and methods using an “adaptive colour transform in residual domain” technique combined with a “chroma quantization offset” technique. The invention addresses a technical problem: a digital colour image composed of RGB components is often transformed to a YCoCr colour space to improve compression efficiency and a technique of adaptive colour transform allows selection, in block units, between compressing the prediction error signal directly in RGB space or transforming it first to YCoCr space; separately, a chroma quantization offset technique adjusts quantization strength for each colour component to improve subjective image quality. The Complete Specification (Paragraph [0051]) describes that when these two techniques are combined, blocks compressed in RGB space and blocks compressed in YCoCr space end up sharing the same quantization strength, meaning quantization strength cannot be set appropriately per colour space, defeating the intended subjective image quality improvement. The claimed invention’s solution, per the Complete Specification (Paragraphs [0053]-[0059]), is a video coding/decoding device/method/program capable of selecting a colour space from among a plurality of colour spaces in coded block units and deriving a chroma quantization offset (a parameter adjusting the quantization parameter or “QP,” of each chroma component) separately for each of the plurality of colour spaces, together with corresponding inverse-quantization functionality.

Procedurally, after filing, the Appellant requested examination and filed Form-13 amendments to claims 1-10 on 03.05.2017. The Respondent, Assistant Controller of Patents and Designs, issued a First Examination Report (“FER”) on 29.01.2020, to which the Appellant replied on 15.04.2020. A hearing was held on 16.04.2021 pursuant to a Hearing Notice dated 22.03.2021, following which the Appellant filed post-hearing written submissions along with amended claims 1-8 on 30.04.2021. By order dated 21.06.2022 (“Impugned Order”), the Respondent refused the application under Section 15 of the Patents Act, 1970, on the ground that the claimed invention lacked inventive step under Section 2(1)(ja) of the Act, relying on three cited prior art documents: D1 (a JCT-VC document titled “HEVC Screen Content Coding Draft Text 1”), D2 (a JCT-VC document titled “SCCE5 Test 3.2.1: In-loop color-space transform”) and D3 (WO2015143671, an international patent publication). The present appeal was filed under Section 117A(2) of the Patents Act, 1970, challenging the Impugned Order.

ISSUES FOR DETERMINATION

1. Whether prior art document D3, published on 01.10.2015 (a date subsequent to the Subject Application’s priority date of 03.10.2014), could properly be cited against the Subject Application and if so, on what statutory basis and to what extent (given the Appellant’s contention that only granted claims of a “prior claiming” document could be invoked under Section 13(1)(b) of the Act and that D3’s claims remained pending/ungranted).
2. Whether prior art documents D1, D2 and D3, individually or in combination, disclosed or rendered obvious the claimed features of the Subject Application – specifically, “selecting, from among a plurality of color spaces, a color space of the prediction error signal in block units” and “deriving a chroma quantization offset…for each of the plurality of color spaces” – such that the claimed invention lacked inventive step under Section 2(1)(ja) of the Patents Act, 1970.
3. Whether the Respondent had properly construed the claims of the Subject Application and adequately mapped the features of the independent claims against the cited prior art in reaching the conclusion of obviousness, as required by the burden-shifting framework for establishing obviousness.

KEY HOLDINGS OF THE COURT

1. On the admissibility of D3, the Court held that although D3 was published after the priority date of the Subject Application, it could still be cited under Section 13(1)(b) of the Patents Act for anticipation by “prior claiming.” Addressing the Appellant’s argument that only granted (not pending) claims of D3 could be invoked, the Court held that since claims must be read in conjunction with the specification, D3 could be cited “to the extent of such conjunction” between its claims and its supporting specification/disclosure.
2. On D1, the Court held that Section 8.6.2 of D1 (setting out equations 8-261 to 8-263 for deriving the quantization parameter “qP” for luma and chroma components, incorporating adjustment values of -5, -3 or 0 depending on the “cu_residual_act_flag” indicating whether adaptive colour transform is applied) disclosed the feature of “chroma quantization offset for each of the plurality of color spaces.” The Court reasoned that Section 7.4.9.5 of D1 (defining the adaptive-colour-transform flag) together with Sections 8.4 and 8.6.8 of D1 (governing the residual modification process invoked when the flag is enabled) established that D1 discloses selecting from among a plurality of colour spaces and switching colour space at the coding-unit level and that the offset values (0, -5 or -3) applied depending on whether adaptive colour transform was used constituted a “quantization offset” within the meaning of the claim, rendering the offset derivation “adaptive” in nature since it depended on the flag. The Court held that D1 thus anticipated the adaptive chroma quantization offset derivation feature.
3. On D2, the Court held that D2’s disclosure of different QP values (delta QPs of -5, -3, -5 for Y, Co and Cg components respectively) applied when colour space transform is used in the YCoCg space would lead a person skilled in the art (“PSITA”) to understand, clearly and unambiguously, that if colour space transform is not applied, the “normal” QP should remain unmodified (i.e., a delta QP/offset of 0 for the original/untransformed colour space) – meaning the offset differs across colour spaces/components, supporting the Respondent’s finding of obviousness.
4. On D3, the Court compared the Subject Application’s Claim 1 against Claims 1 and 2 of D3, noting that D3 discloses adjusting final or intermediate QP values for colour components of a second colour space (YCoCg) using per-component adjustment factors of -5, -3 and -5 relative to a first colour space (RGB) and a decoder performing the converse switching operation. Although D3’s claims did not explicitly state that the RGB (first) colour space itself is modified, the Court held, relying on Paragraph [0149] of D3’s specification (disclosing two distinct syntax elements – “slice_qp_delta” and “slice_qp_delta_cs2” – signalling QP offsets for the first and second colour spaces respectively), that such modification was implicit and supported by the specification and that QP adjustment was applicable to both colour spaces notwithstanding the absence of explicit claim language to that effect.
5. The Court accordingly rejected the Appellant’s contention that D1 to D3 were confined merely to colour space conversion/switching and did not disclose “selecting a colour space from among a plurality of colour spaces,” holding this contention “untenable.”
6. Final holding and operative order: The Court held that the subject matter of the Subject Application was rendered obvious in light of the combined disclosures of D1 to D3 and therefore failed to satisfy the requirement of inventive step under Section 2(1)(ja) of the Patents Act, 1970. The appeal was accordingly dismissed as devoid of merit, upholding the Impugned Order dated 21.06.2022 refusing the Subject Application under Section 15 of the Act.

STATUTORY PROVISIONS INVOLVED

Section 15 of the Patents Act, 1970, empowering the Controller to refuse a patent application or require amendment, was the provision under which the Respondent’s Impugned Order refusing the Subject Application was passed.

Section 2(1)(ja) of the Patents Act, 1970, defining “inventive step” as a feature involving technical advance or economic significance that is not obvious to a person skilled in the art, was the central substantive provision applied by both the Respondent and the Court in holding the claimed invention obvious in light of D1 to D3.

Section 117A of the Patents Act, 1970 and specifically sub-section (2) thereof, under which the present appeal was filed before the High Court challenging the Controller’s order, was the jurisdictional basis for the appeal.

Section 13(1)(b) of the Patents Act, 1970, concerning anticipation by “prior claiming” (i.e., citation of an earlier-filed but later-published application whose claims are identical to or encompass the claims of the application under examination), was applied by the Court in holding that D3, despite being published after the Subject Application’s priority date, could be cited on this basis, with the Court permitting such citation “to the extent” that D3’s claims could be read in conjunction with its supporting specification.

The judgment also referenced, in the Respondent’s submissions (though not independently the basis for the Court’s operative holding, which rested on Section 2(1)(ja)), Section 64(1)(a) of the Patents Act, concerning revocation of patents for prior claiming and the factors for its application as set out in Boehringer Ingelheim Pharma GMBH & Co. KG v. Vee Excel Drugs and Pharmaceuticals Private Ltd. and Others and reiterated in FMC Corporation & Ors. v. Nacto Pharma Limited – namely, that the prior patent must be Indian, have an earlier priority date and claim the same invention as the later application, with the publication date of the prior patent being irrelevant to this analysis.

REASONING OF THE COURT

The Court’s reasoning proceeded by systematically working through each of the three cited prior art documents against the specific claim language of the Subject Application, particularly the “adaptive chroma quantization offset derivation” feature and the “selecting…a color space… in block units” feature of Claim 1 (and its parallel formulations in Claims 4, 7 and 8). For D1, the Court reasoned textually from the specific equations in Section 8.6.2, observing that the offset values applied to the QP calculation (0, -5 or -3) were contingent on the “cu_residual_act_flag,” which itself signals whether adaptive colour transform is applied to a given coding unit’s residual samples – and reasoned that this contingency was precisely what rendered the offset “adaptive” in the sense required by the claim, notwithstanding the Appellant’s argument that D1 was silent on the concept of a “plurality of color spaces” as such. The Court supported this conclusion by tracing the interlocking operation of Sections 7.4.9.5, 8.4 and 8.6.8 of D1, reasoning that together these sections established that D1’s disclosed system does select among colour spaces and applies a transformation/modification process specific to the selected space, thereby meeting the claimed selection feature as well.

For D2, the Court’s reasoning relied on an inference a person skilled in the art would draw from the disclosed delta-QP values: since D2 discloses non-zero offsets when colour space transform is applied, the necessary implication – obvious to a PSITA – is that the offset is zero (i.e., no modification) when the transform is not applied, meaning the disclosed system inherently applies different offsets depending on which colour space is operative, again meeting the “offset for each of the plurality of color spaces” feature.

For D3, the Court’s reasoning turned on distinguishing between what is explicitly claimed and what is implicitly enabled by the accompanying specification. Although D3’s claims focused on adjustment of the second colour space (YCoCg) without explicit reference to modification of the first (RGB) space, the Court reasoned that Paragraph [0149]’s disclosure of two distinct, independently signalled syntax elements for QP offsets in the first and second colour spaces respectively demonstrated that the underlying technical teaching was not confined to one-directional adjustment and that this specification content could properly inform the scope of the claims for purposes of an obviousness comparison, consistent with the Court’s earlier ruling on the “prior claiming” admissibility question (i.e., that claims must be read together with the specification).

Having found each of D1, D2 and D3 individually and cumulatively to disclose or render obvious the key claimed features, the Court rejected the Appellant’s overarching characterization of the prior art as confined to mere “colour space conversion or switching” without any concept of “selecting” among colour spaces, treating this as inconsistent with the specific textual disclosures identified in each document. The Court’s reasoning notably did not turn on any dispute as to claim construction methodology as such, but rather proceeded through direct, granular technical comparison of the claim language against the specific numbered sections, equations and paragraphs of the prior art documents, ultimately concluding that the combination of disclosures left no genuine inventive contribution once the relevant sections were properly read.

DOCTRINAL SIGNIFICANCE

Within the bounds of what was actually decided, this is a fact-intensive patent appeal turning on detailed technical comparison of specific claim language against specific prior art disclosures in the field of video coding/compression standards (HEVC-related technology). Its principal point of more general applicability lies in the Court’s treatment of the admissibility of a prior art document (D3) published after the priority date of the application under examination, where the Court held that such a document may still be cited for anticipation by prior claiming under Section 13(1)(b) of the Patents Act and that its claims may be read together with its supporting specification for this purpose, even where the claims of that prior document remain pending/ungranted – a procedural point of some significance for future prior-claiming disputes, though the Court did not elaborate at length on the precise contours or limits of this “reading together” principle beyond applying it to the facts at hand. Beyond this, the judgment’s holdings are essentially confined to the specific technical merits of the Subject Application vis-à-vis the three cited prior art documents and does not purport to establish any new general test for inventive step or claim construction beyond applying the established statutory standard under Section 2(1)(ja) to the facts. The decision is a first-instance statutory appeal disposed of on the merits of obviousness, with no indication in the text of any further appeal or subsequent proceedings.

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