Fresenius Kabi Ipsum S.r.l. v. The Asst. Controller of Patents and Designs & Anr.

High Court of Delhi at New Delhi, Single Judge | Date of Decision: 31st August, 2026 Case Number: C.A.(COMM.IPD-PAT) 7/2025 (CNR No. DLHC010119472025) Bench: Hon’ble Ms. Justice Jyoti Singh

BACKGROUND

The Appellant, Fresenius Kabi iPSUM S.r.l., filed Indian Patent Application No. 201611009993 on 22.03.2016 for an invention titled “AN IMPROVED PROCESS FOR THE PREPARATION OF SUGAMMADEX WHICH INVOLVES THE USE OF A SALT OF 3-MERCAPTO PROPIONIC ACID, PREFERABLY THE DI SODIUM SALT OF 3-MERCAPTO PROPIONIC ACID.” The invention relates to an improved process for preparing sugammadex by reacting an isolated salt of 3-mercaptopropionic acid (preferably the disodium, dipotassium or dilithium salt) with 6-per-deoxy-6-per-halo-γ-cyclodextrin, said to improve the overall purity and/or reaction time of the resulting sugammadex, addressing problems in the prior art including unsatisfactory purity, lengthy reaction times unsuitable for large-scale production, use of difficult-to-handle pyrophoric reagents such as sodium hydride and reliance on industrially impractical purification techniques such as chromatography and UV light. The Complete Specification discloses embodiments including preparation and purification of the halo-cyclodextrin (Examples 1 and 2), preparation of the disodium salt of 3-mercaptopropionic acid (Example 3) and multiple processes for preparing sugammadex using the isolated salt (Examples 4A, 5 and 6), with reported purities ranging up to 99.43%, 98.28% and similar figures across examples.

The application was published on 26.01.2018; a request for examination was filed on 14.06.2019; the First Examination Report (“FER”) issued on 30.03.2021 raised objections under Section 2(1)(ja) (lack of inventive step) and Section 3(d) (non-patentability) for claims 1-16, along with formal objections, citing prior art D1 (WO2014125501A1), D2 (WO2016194001A1) and D3 (WO0140316A1); the Appellant replied on 29.09.2021, amending claims for clarity. Two pre-grant oppositions were filed under Section 25(1) of the Patents Act, 1970  the first by one Ms. Ritu Sharma (23.07.2020) and the second by Respondent No. 2 (21.10.2021), the latter raising anticipation under Section 25(1)(b) in view of D1-D2, lack of inventive step under Section 25(1)(e) in view of D1-D7 and non-patentability under Section 25(1)(f); the Appellant filed a reply statement on 25.02.2022. During the course of oral hearings (with a final hearing on 08.10.2024, preceded by an earlier hearing on 29.08.2023), Respondent No. 2 raised, for the first time, an objection of prior claiming, which the Assistant Controller rejected. Written submissions were filed by both sides on 23.10.2024 (and earlier, on 12.09.2023). By order dated 21.11.2024 (“impugned order”), the Assistant Controller refused the application on grounds of lack of novelty, lack of inventive step and non-patentability under Section 3(d), relying on prior art documents D1, D3, D4 and D7. The present appeal was filed under Section 117A(2) of the Patents Act, 1970, challenging the refusal on both procedural grounds (denial of a separate hearing under Section 14) and, in the alternative, on the merits.

ISSUES FOR DETERMINATION

1. Whether the Assistant Controller was obligated to afford the Appellant a separate opportunity of hearing under Section 14 of the Patents Act, 1970 read with Rule 129 of the Patents Rules, 2003, notwithstanding that a hearing had already been granted to the Appellant under Section 25(1) in the pre-grant opposition proceedings and whether the failure to do so vitiated the impugned order.
2. Whether the impugned order was a reasoned and speaking order addressing the specific technical contentions raised by the Appellant, including the significance of using an isolated (as opposed to in situ generated) salt of 3-mercaptopropionic acid, the identification of the closest prior art and the assessment of technical advancement/inventive step without the benefit of hindsight.
3. Whether, on the merits, the claimed invention lacked novelty in light of prior art D1, given the Appellant’s contention that D1 discloses only in situ generation of the disodium salt of 3-mercaptopropionic acid, whereas the claimed invention uses an isolated salt a distinction the Appellant contended was technically significant (affecting purity, impurity profile, reaction reproducibility and industrial scalability) and not merely cosmetic.
4. Whether the claimed invention lacked inventive step in light of D1, D3, D4 and D7, considered individually or in combination and whether the Assistant Controller’s combination of these documents involved an impermissible hindsight-driven “mosaic” approach.
5. Whether the claimed invention was non-patentable under Section 3(d) of the Patents Act, 1970, as a mere use of a known process without a new reactant or new product.

KEY HOLDINGS OF THE COURT

1. On the Section 14 hearing issue, the Court held that there was merit in the Appellant’s contention and that failure to afford a separate hearing under Section 14 violated the statutory mandate, vitiating the impugned order. The Court traced the statutory scheme (Sections 11A, 11B, 12, 13, 14 and 15 governing the “examination process,” as distinct from Section 25 governing “opposition proceedings”) and, applying the Division Bench’s ruling in Novartis AG v. Natco Pharma Limited and Another (2024 SCC OnLine Del 152), held that examination under Chapter IV (including the Section 14 hearing) and opposition under Chapter V (including the Section 25(1) hearing) are independent, parallel, non-merging statutory pathways; a pre-grant opponent’s role is confined to aiding the Controller’s examination and does not confer a right of hearing in the Section 14 examination process and conversely, a hearing granted under Section 25(1) does not substitute for or extinguish the applicant’s separate, mandatory right to a hearing under Section 14 before an adverse decision is taken. The Court relied further on Zydus Healthcare Ltd. v. Assistant Controller of Patents and Designs and Ors. (pre-grant opposition and examination being separate proceedings, neither a substitute for the other), AIC246 AG & Co. KG v. The Patent Office of India and Ors. (Bombay High Court, setting aside a Controller’s order for denial of a Section 14 hearing despite a Section 25(1) hearing having been granted and rejecting the argument that this would cause “duplication”), Ferid Allani v. Union of India and Others (Rule 129 being a statutory rule casting a mandatory duty on the Controller to grant a hearing before exercising any adverse discretionary power) and UPL Limited v. Union of India and Others (Calcutta High Court, holding Section 25(1) opposition and Chapter IV examination to be distinct processes requiring separate adjudication, albeit potentially combinable into a composite, reasoned Section 15 order). The Court expressly rejected the Respondents’ contention that a separate Section 14 hearing “would have made no difference to the final outcome,” holding that a post-order assertion of this kind cannot legitimize or condone a clear breach of a mandatory statutory safeguard and that the denial deprived the Appellant of a substantive not merely procedural right to respond to objections and seek curative amendments.
2. On the adequacy of reasoning, although the Court declined to make a final determination on the merits (given its disposition on the Section 14 point), it nonetheless flagged, for the benefit of the fresh consideration to follow, several specific questions the impugned order had failed to address: (i) whether D1’s disclosure was explicit or implicit for purposes of assessing novelty; (ii) which document constituted the closest prior art for inventive-step analysis; (iii) whether the claimed invention demonstrated technical advancement, existing-knowledge enhancement or economic significance rendering it non-obvious; (iv) why the isolation step was not a new technical feature; (v) why a purer product (as claimed) was not a “new product”; and (vi) why features such as purity, reduced reaction time and use of an isolated salt did not constitute novel/inventive features. The Court held the Assistant Controller’s observation that “percentage purity does not fall within the concern of the Patent Office” to be “fallacious,” reasoning that accepting this position would foreclose meaningful analysis of many claimed inventions and noted that the Appellant’s experimental data had not been considered.
3. On the isolated-salt distinction, the Court held that the impugned order appeared to have been “largely influenced” by treating the difference between an isolated and an in situ generated salt as “merely cosmetic,” without engaging with the Appellant’s submission that isolated salts are purified, stable, independently characterizable chemical entities (unlike transient, uncharacterized in situ intermediates) and that this distinction had a demonstrated resultant effect on yield, purity and industrial scalability a submission the Court found had not been considered, despite the settled principle that anticipation requires explicit disclosure of every claimed element and that even a single distinguishing technical feature absent from the prior art suffices to establish novelty.
4. On inventive step and the “mosaic” of prior art, the Court held there was merit in the Appellant’s contention that the Assistant Controller had, without articulated reasoning, constructed a combination of D1, D3, D4 and D7 to find obviousness, in a manner reflecting an impermissible hindsight approach the order containing no explanation of why a person skilled in the art would select D1 as the starting point and then combine it with the teachings of D3, D4 and D7, nor how the resulting combination would render the claimed invention obvious.
5. Final holding and operative order: The Court held that, in light of the Section 14 violation, the matter required reconsideration and accordingly refrained from ruling on the substantive rival contentions on novelty, inventive step or Section 3(d) non-patentability so as not to prejudice either party while nonetheless flagging the specific unaddressed issues identified above for consideration on remand. The appeal was allowed to the extent that the impugned order dated 21.11.2024 was set aside and the matter was remanded to the Assistant Controller for fresh consideration of the patent application, with a decision to be rendered within six months, in compliance with the procedures under Sections 14, 15 and 25 of the Patents Act, 1970 and Rule 129 of the 2003 Rules, after granting an opportunity of hearing to both the Appellant and Respondent No. 2 and without being influenced by the impugned order. No opinion was expressed on the merits of the case.

STATUTORY PROVISIONS INVOLVED

Section 14 of the Patents Act, 1970, casting a duty on the Controller to communicate the gist of an adverse Examiner’s report to the applicant and to grant a hearing if requested before disposing of the application, was the central provision on which the appeal was decided; the Court held this hearing is mandatory and statutorily distinct from and not substitutable by, a hearing granted under Section 25(1).

Rule 129 of the Patents Rules, 2003, requiring the Controller to grant an applicant a hearing (ordinarily on 10 days’ notice) before exercising any discretionary power likely to adversely affect the applicant, was applied as reinforcing the mandatory character of the Section 14 hearing requirement, following Ferid Allani v. Union of India and Others.

Sections 11A, 11B, 12, 13 and 15 of the Patents Act, 1970, governing publication, request for examination, the Examiner’s enquiry (including anticipation by publication under Section 13) and the Controller’s power to refuse or require amendment of an application respectively, were traced by the Court as forming the integrated “examination process” within which the Section 14 hearing is embedded, as distinct from the opposition process under Section 25.

Section 25(1) of the Patents Act, 1970, governing pre-grant opposition (which may be filed by “any person” on enumerated grounds, including, per settled law, persons without direct or tangible interest in the patent), was held by the Court, following Novartis AG v. Natco Pharma Limited, to constitute a statutorily separate and parallel not merged or convergent process from the Section 14 examination hearing, such that a hearing under one does not discharge the Controller’s obligation under the other.

Section 2(1)(ja) of the Patents Act, 1970 (inventive step) and Section 3(d) of the Patents Act, 1970 (non-patentability of the mere use of a known process unless it results in a new product or employs at least one new reactant), were the substantive grounds on which the impugned order refused the application; the Court did not make a final ruling on either ground, given the procedural disposition, but flagged specific deficiencies in the Assistant Controller’s reasoning on both (absence of closest-prior-art identification and hindsight-driven combination of references on inventive step; absence of engagement with the purity/new-product argument on Section 3(d)).

REASONING OF THE COURT

The Court’s reasoning on the central procedural issue proceeded through close statutory construction, tracing the Patents Act’s structure from Sections 11A through 15 (examination) and separately Section 25 (opposition) and reasoning that the legislature’s deliberate placement of these two hearing rights in different chapters, triggered by different events (an adverse Examiner’s report, versus a third-party representation), involving different parties (the Controller and applicant alone, versus the Controller, applicant and opponent), reflects a considered statutory design rather than redundancy. The Court adopted and applied the Division Bench’s reasoning in Novartis AG that pre-grant opposition proceedings, being open to “any person” regardless of direct interest, serve an inquisitorial, information-gathering function for the Controller rather than constituting adversarial lis between fixed parties and that the Controller retains an independent, non-delegable statutory obligation to examine the application on its own merits under Section 15 regardless of the opposition’s outcome to conclude that the two hearing rights cannot be conflated or treated as substitutes. The Court reinforced this by reference to the Bombay High Court’s reasoning in AIC246 AG, which had specifically rejected a “duplication of proceedings” objection to requiring separate hearings and by the Patent Manual’s own clauses (09.04(10), 09.04(12), 09.06(10)) confirming that no patent may be refused without a Section 14 hearing and that a composite but procedurally compliant order must be passed under Section 15 following both examination and opposition.

On the Respondents’ argument that a separate hearing would have made no difference to the outcome, the Court’s reasoning rejected this as an impermissible post hoc rationalization: a mandatory procedural safeguard cannot be excused by speculative assertions, made after the fact, about what the outcome would have been had the safeguard been honoured to permit such reasoning would effectively nullify the statutory right whenever a decision-maker is confident of its own correctness, which defeats the very purpose of a hearing requirement.

Although declining to resolve the substantive merits (so as not to prejudice either side on remand), the Court’s observations on the technical issues followed a consistent pattern: identifying specific, concrete arguments and evidence advanced by the Appellant (the chemical distinction between isolated and in situ salts; the demonstrated absence of certain impurities; comparative purity and reaction-time data; the optional character of the purification/drying step) and noting, in each instance, that the impugned order either failed to engage with these points at all or dismissed them through unreasoned, categorical statements (e.g., that purity differences fall outside Patent Office concern or that the isolated-salt distinction is “merely cosmetic”) without the detailed, document-specific analysis necessary to sustain a finding of anticipation or obviousness. The Court’s reasoning on the “mosaic” objection drew on the established patent-law principle (reflected in the parties’ own citations) that obviousness must be assessed prospectively through the eyes of a person skilled in the art, without the benefit of hindsight from the patent specification itself and that combining multiple prior art references to defeat inventive step requires an articulated chain of reasoning as to why the skilled person would have been motivated to select and combine those particular references a chain the Court found entirely absent from the impugned order.

DOCTRINAL SIGNIFICANCE

Within the bounds of what was actually decided, this judgment’s primary and most significant holding is procedural: it firmly establishes, following and reinforcing Novartis AG v. Natco Pharma Limited, Zydus Healthcare, AIC246 AG and Ferid Allani, that the hearing right under Section 14 of the Patents Act, 1970 (read with Rule 129 of the 2003 Rules) is wholly independent of and cannot be substituted by, a hearing granted under Section 25(1) during pre-grant opposition proceedings even where the applicant has, in substance, had multiple opportunities to address objections through the opposition hearing process. This consolidates a growing and now fairly well-settled line of authority (spanning this Court, the Bombay High Court and the Calcutta High Court) establishing a bright-line procedural rule that patent applicants are entitled to both hearings as a matter of statutory right and that a Controller’s failure to grant a separate Section 14 hearing is an independently sufficient ground to set aside a refusal order, regardless of the substantive merits of that refusal. The judgment also illustrates a now-recurring pattern in Delhi High Court patent appeals (seen in several contemporaneous decisions) of using such procedural violations as a basis for remand without resolving substantive patentability questions, while nonetheless flagging for the assistance of the first-instance decision-maker on remand specific analytical gaps in the original order (absence of closest-prior-art identification, hindsight-driven mosaicing of multiple prior art references, failure to engage with purity/technical-advancement evidence and unreasoned dismissal of a claimed technical distinction as “cosmetic”). The decision does not itself resolve and expressly declines to resolve, the substantive questions of whether the claimed invention is novel over D1, involves an inventive step over D1/D3/D4/D7 or is excluded under Section 3(d); these remain to be determined by the Assistant Controller on fresh consideration, informed by (but not bound to follow) the Court’s observations.

Compulsory Licensing Copyright Act Copyright Act 1957 Copyright Amendment 2012 copyright case laws Copyright Enforcement Copyright Infringement Copyright Law Copyright Protection India Copyright Registration Copyright Rules Deceptive Similarity Descriptive Marks India Digital Copyright FRAND obligations Goodwill Indian IP Framework Indian Patent Act Indian Patent Law Indian Trademark Law Intellectual Property Law IP infringement IP Law India Madrid Protocol Patent Claims Patent Enforcement Patent Infringement Patent law Patent Revocation Patents Act Patents Act 1970 Pharmaceutical Patents Section 9 Trade Marks Act Section 29 The Patent Act 1970 Trademark Assignment India Trademark Dilution Trademark Examination Trademark Infringement Trademark Registration Trade Marks Act 1999 Trade Marks Rules 2017 Trans-border Reputation TRIPS Compliance Well-Known Trademark