Philip Morris Products S.A. v. Deputy Controller of Patents and Designs & Anr.

High Court of Delhi | 17 April 2026 Case Numbers: C.A.(COMM.IPD-PAT) 6/2024, 40/2024, 49/2024, 61/2024, 79/2024, 28/2024, 32/2024 and 27/2025 Bench: Hon’ble Ms. Justice Jyoti Singh

BACKGROUND

This common order disposes of eight connected appeals, all filed by the same appellant, Philip Morris Products S.A., under Section 117A of the Patents Act, 1970, against orders of the Deputy Controller or Assistant Controller of Patents and Designs refusing grant of patent in respect of eight distinct patent applications relating to aerosol-generating devices, nicotine delivery systems and tobacco-related technology. Each appeal concerns a separate invention with separate facts, though common legal grounds arise across several of them, principally the interpretation and application of Section 3(b) of the Patents Act, 1970 and its interplay with The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019 (“ENDS Act”).

C.A.(COMM.IPD-PAT) 6/2024 concerned Patent Application No. 201617029499 dated 30.08.2016, refused by order dated 19.10.2023. The application traced its priority to a US provisional application filed 28.04.2014, a corresponding EP application filed the same date and a PCT application filed 23.04.2015. The First Examination Report was issued on 20.04.2020, reply filed on 08.10.2020, hearing notice issued 11.08.2023, hearing held 11.09.2023 and post-hearing written submissions filed 22.09.2023. The subject invention was a flavoured nicotine powder inhaler designed to deliver flavoured powder at low air flow rates within conventional smoking-regime inhalation rates, providing a metered dose of flavoured nicotine with simultaneous delivery of a second active pharmaceutical ingredient having medicinal use. The technical problem addressed was that existing Dry Powder Inhalers required high inhalation rates for correct dosing and complete disaggregation of powder, leaving residual active pharmaceutical ingredient deposited in the upper airways and were therefore unsuitable for delivery at smoking-regime inhalation rates. The application was refused under Section 3(b) of the Act, with the impugned order relying on nine published documents that had not been cited in the FER or the hearing notice.

C.A.(COMM.IPD-PAT) 40/2024 concerned Patent Application No. 201617028283 dated 19.08.2016, refused by order dated 01.02.2024. The application claimed priority from EP applications filed 21.05.2014 and was filed as a PCT national phase application via PCT/EP2015/061293 titled “Aerosol-Generating Article with Multi-Material Susceptor.” The FER was issued 21.01.2020, reply filed 11.05.2020 with amended claims, hearing notice issued 02.11.2023, hearing held 01.12.2023 and written submissions filed 16.01.2024. The invention related to an aerosol-generating article comprising an aerosol-forming substrate and a susceptor with a first and second susceptor material in intimate physical contact, the second having a Curie temperature lower than 500°C, allowing optimised heating and temperature control without direct temperature monitoring. The technical problem solved was improving control of the temperature of the aerosol-forming substrate in inductive heating systems, where no direct means existed to measure the temperature inside the consumable.

C.A.(COMM.IPD-PAT) 49/2024 concerned Patent Application No. 202017032493 dated 29.07.2020, refused by order dated 05.03.2024. The application claimed priority from an EP application filed 23.04.2018 and was filed as a PCT national phase application via PCT/EP2019/060380 titled “An Aerosol-Generating Device Having Temperature-Based Control.” The FER was issued 20.05.2022, reply filed 11.11.2022, hearing notice issued 17.11.2023, hearing held 15.12.2023 and written submissions with amended claims filed 22.12.2023. The invention related to an aerosol-generating device with a controller arranged to control power supply to an electrical heater based on a determined rate of increase in temperature, addressing the technical problem of overheating caused by variations in water content of the aerosol-forming substrate.

C.A.(COMM.IPD-PAT) 61/2024 concerned Patent Application No. 202117030336 dated 06.07.2021, refused by order dated 30.03.2024. The application claimed priority from an EP application filed 08.04.2019 and was filed as a PCT national phase application via PCT/EP2020/057507 titled “Aerosol-Generating Article Comprising An Aerosol-Generating Substrate Comprising An Aerosol-Generating Film.” The FER was issued 27.04.2023, reply filed 04.10.2023, hearing notice issued 01.01.2024, hearing held 25.01.2024 and written submissions filed 31.01.2024. The invention related to an aerosol-generating article with a substantially tobacco-free aerosol-generating film comprising a polyhydric alcohol and a cellulose-based film-forming agent, addressing the technical problem of environmental degradation associated with known aerosol-generating substrates and aiming to provide a substrate that leaves minimal residue and is easier to dispose of.

C.A.(COMM.IPD-PAT) 79/2024 concerned Patent Application No. 6886/DELNP/2014 dated 16.08.2014, refused by order dated 07.06.2024. The application claimed priority from an EP application filed 13.02.2012 and was filed as a PCT national phase application via PCT/EP2012/077086 titled “Aerosol Generating Article having an Aerosol Cooling Element.” The FER was issued 21.02.2019, reply filed 16.08.2019, hearing notices issued 31.08.2022 and 21.10.2022, hearing held 09.11.2022 and written submissions filed 22.11.2024. The invention related to an aerosol-generating article comprising an aerosol-forming substrate and an aerosol-cooling element, addressing the technical problem that aerosol generated by heating (rather than combusting) a tobacco-containing substrate has a higher water content and may be perceived by a consumer as having a higher temperature than conventional cigarette smoke, despite being generated at a significantly lower actual temperature.

C.A.(COMM.IPD-PAT) 28/2024 concerned Patent Application No. 201917025257 dated 25.06.2019, refused by order dated 02.01.2024. The application claimed priority from an EP application filed 24.02.2017 and was filed as a PCT national phase application via PCT/EP2018/053579 titled “An Aerosol-Generating Element Mount for an Aerosol-Generating System.” The FER was issued 08.07.2021, reply filed 26.11.2021, hearing notice issued 09.11.2023, hearing held 28.11.2023 and written submissions filed 08.12.2023. The invention related to a mounting arrangement for a fluid-permeable aerosol-generating element (atomiser assembly) within a cartridge, addressing the technical problem that contact between liquid/vapour in the airflow path and electrical contacts over time damages those contacts, by providing a moulded atomiser mount isolating the electrical contact portions from both the airflow path and the liquid substrate. As in C.A. 6/2024, the impugned order relied on nine documents not previously notified to the appellant.

C.A.(COMM.IPD-PAT) 32/2024 concerned Patent Application No. 201617026827 dated 05.08.2016, refused by order dated 24.01.2024. The application claimed priority from an EP application filed 21.05.2014 and was filed as a PCT national phase application via PCT/EP2015/061217 titled “Aerosol-forming substrate and aerosol-delivery system.” The FER was issued 13.11.2019, reply filed 18.03.2020, hearing notice issued 09.11.2023, hearing held 16.11.2023 and written submissions filed 28.11.2023. The invention related to an aerosol-forming substrate for use with an inductive heating device employing a first and second susceptor material with differing Curie temperatures, enabling contactless temperature control to avoid overheating.

C.A.(COMM.IPD-PAT) 27/2025 concerned Patent Application No. 201717043299 dated 02.12.2017, refused by order dated 14.02.2025. The application claimed priority from an EP application filed 29.05.2015 and was filed as a PCT national phase application via PCT/EP2016/062008 titled “Method of Making Tobacco Cut Filler.” The FER was issued 28.09.2020, reply filed 10.03.2021 and the matter went through an extended procedural history involving multiple hearing notices (11.08.2023, 24.08.2023, 01.02.2024, 21.03.2024) and adjournments, with the agent of the appellant appearing for hearings on 22.09.2023 and 19.02.2024, seeking adjournment on 19.03.2024 and appearing again on 22.04.2024, with written submissions filed on 05.10.2023 and 07.05.2024. The invention related to a process for producing tobacco cut filler comprising reconstituted tobacco with improved filling power and reduced production of tobacco dust, intended to allow lesser tobacco material to be used in a standard-dimension tobacco rod while maintaining the same consumer experience and reducing the amount of tobacco combusted.

Across all eight appeals, the appellant’s counsel raised overlapping but appeal-specific arguments. In two of the appeals (C.A. 6/2024 and C.A. 28/2024), it was argued that the impugned orders relied for the first time on nine published documents  none of which had been cited in the FER or hearing notice  depriving the appellant of any opportunity to address or rebut them, in violation of principles of natural justice as articulated in Otsuka Pharmaceutical Co. Ltd. v. Controller of Patents, 2022 SCC OnLine Del 4982 and Perkinelmer Health Sciences Inc and Others v. Controller of Patents, 2023 SCC OnLine Del 8590. Across seven of the eight appeals (all save C.A. 27/2025, in which the ENDS Act argument is raised in a different posture concerning a non-aerosol invention), it was argued that the Controller had misapplied and misinterpreted Section 3(b) of the Patents Act by treating the ENDS Act’s blanket prohibition on electronic cigarettes as determinative of non-patentability under Section 3(b), without independent, scientific or evidence-based analysis of whether the specific claimed invention’s primary or intended use causes serious prejudice to human health. Several appellants also pointed to the grant of corresponding patents in foreign jurisdictions (the US, Canada, Japan and others) as a fact that, while not binding, ought not to have been ignored, particularly for the sake of uniformity in interpreting questions of law and public policy. In multiple appeals, the appellant also argued that the impugned orders failed to engage with or even reference the detailed written submissions filed by the appellant, citing Agriboard International LLC v. Deputy Controller of Patents and Designs, 2022 SCC OnLine Del 940 and Boehringer Ingelheim Vetmedica GMBH v. Controller of Patents, 2024 SCC OnLine Del 8578.

The respondents, represented by learned CGSCs, defended each impugned order on the footing that the claimed inventions  irrespective of the precise technical framing employed by the appellant (such as “temperature-based control device,” “susceptor material,” or “cartridge”)  were, in substance, components or systems intended to function as e-cigarettes, heat-not-burn products or nicotine/tobacco delivery devices and therefore fell within the prohibition of the ENDS Act and were non-patentable under Section 3(b) as their primary or intended use or commercial exploitation would cause serious prejudice to human health. Reliance was placed on the ICMR’s 2019 White Paper on Electronic Nicotine Delivery Systems and the WHO’s 2021 report on the Global Tobacco Epidemic to establish the inherently harmful nature of nicotine delivery, whether by combustion or otherwise.

ISSUES FOR DETERMINATION

1. The first issue, arising specifically in C.A. (COMM.IPD-PAT) 6/2024 and C.A. (COMM.IPD-PAT) 28/2024, was whether the Controller’s reliance, for the first time in the impugned final order, on nine published documents that had not been cited in the First Examination Report or in the hearing notice, without affording the appellant any opportunity to address or rebut them, violated the principles of natural justice so as to vitiate the impugned orders.
2. The second issue, common to C.A. (COMM.IPD-PAT) 6/2024, 28/2024, 32/2024, 40/2024, 49/2024, 61/2024 and 79/2024, was whether the Controller had correctly interpreted and applied Section 3(b) of the Patents Act, 1970 in refusing each application and specifically whether it was permissible for the Controller to treat the statutory prohibition under the ENDS Act on the manufacture, sale and distribution of electronic cigarettes as determinative of non-patentability under Section 3(b), without an independent, evidence-based, scientific assessment of whether the primary or intended use or commercial exploitation of each specific claimed invention causes serious prejudice to human, animal or plant life or health.
3. The third issue was whether the Controller, in each of the impugned orders, had failed to engage with the substance of the written submissions filed by the appellant  including arguments distinguishing the technical features of the claimed inventions from conventional combustible cigarettes, arguments regarding the medicinal and harm-reduction uses of nicotine and nicotine-replacement therapies and arguments regarding the grant of patents for similar or corresponding inventions in other jurisdictions  and whether such failure rendered the impugned orders unreasoned and unsustainable.
4. The fourth issue, raised in C.A. (COMM.IPD-PAT) 27/2025 specifically, was whether the Controller had erred in relying on the ENDS Act and on reports concerning Electronic Nicotine Delivery Systems (which the appellant contended were inapplicable to its invention, since the invention related to a method of making tobacco cut filler and had no connection whatsoever to electronic cigarettes or aerosol-generating devices) to refuse an application that did not, on its face, fall within the technical field addressed by such reports or legislation.
5. The fifth issue was the appropriate remedy where these infirmities were established  whether the impugned orders should be set aside outright in favour of the appellant or whether the matters should be remanded to the Controller for fresh consideration.

KEY HOLDINGS OF THE COURT

1. On the natural justice ground in C.A. (COMM.IPD-PAT) 6/2024 and C.A. (COMM.IPD-PAT) 28/2024, the Court held that the Controller’s reliance, for the first time in the final impugned orders, on nine documents that were neither notified in the FER nor in the hearing notice, without giving the appellant any opportunity to rebut them, was a clear violation of principles of natural justice. The Court noted that the respondent was unable to dispute this factual position. Relying on its own prior decisions in Otsuka Pharmaceutical Co. Ltd. v. Controller of Patents, 2022 SCC OnLine Del 4982 and Perkinelmer Health Sciences Inc and Others v. Controller of Patents, 2023 SCC OnLine Del 8590, the Court reaffirmed that no person can be condemned unheard, that all objections on which the Controller proposes to rely must be communicated to the applicant at the stage of the FER or the hearing notice and that no new grounds can be introduced by the Controller or Examiner at the time of the hearing or in the final order. The Court also drew support from the Calcutta High Court’s decision in ITC Limited v. The Controller of Patents Designs and Trademark, MANU/WB/1167/2025, which similarly held that reliance on additional documents cited for the first time in the impugned order, without affording the applicant an opportunity to deal with them either in the FER or the hearing notice, constitutes both a serious procedural infirmity and a violation of principles of natural justice.
2. On the interpretation and application of Section 3(b) of the Patents Act, the Court held that the legislative intent behind Section 3(b) is to set a high threshold for refusing patent protection to an invention whose primary or intended use may cause prejudice or injury to human health, but this analysis must be grounded in real scientific basis and must be apparent from the reasoning of the impugned order itself. The mere fact that a claimed invention relates to an aerosol-generating substance, device or the use of tobacco or nicotine cannot, by itself, be a ground for refusal under Section 3(b). The Court found merit in the appellant’s submission that the Patents Act, 1970, save for the specific exception under Section 4 relating to inventions concerning atomic energy, contains no provision making patentability contingent on government policies, guidelines or other statutes and that there is no provision in the Act that per se bars patentability of e-cigarettes, aerosol-generating devices or inventions directed at reducing the harmful effects of cigarettes. The Court noted that the ENDS Act’s definition of “electronic cigarette” expressly excludes products licensed under the Drugs and Cosmetics Act, 1940 and that even under the ENDS Act there is no blanket ban that could automatically extend to bar patent protection before any question of licensing under the 1940 Act even arises.
3. The Court found substantial merit in the appellant’s argument concerning technological progression in the tobacco industry  that historical innovations such as the cigarette filter and heat-not-burn devices have reduced the harmful effects associated with conventional combustion of tobacco and that refusing patent protection to such innovations without properly weighing their contribution to harm reduction would create an embargo on further development in the field, to the detriment of consumers who would otherwise benefit from products that reduce, rather than eliminate, exposure to harmful substances. The Court noted the appellant’s reliance on a clinical study involving 984 adult American smokers examining biomarkers of exposure and biological effect upon switching from conventional cigarettes to a heat-not-burn system, which the Court found relevant material that none of the impugned orders had even acknowledged, let alone considered.
4. The Court held that the Controller ought not to have been oblivious to the fact that corresponding patent applications for several of these inventions had been granted in other jurisdictions, including the United States, Canada and Japan. While such grants are not binding on the Controller and the Controller remains entitled to conduct an independent analysis and arrive at a different conclusion if there is substantial cogent material to do so, the Court held that this can only be done after such material is brought on record with an opportunity to the applicant to contest it, followed by a reasoned order explaining why the invention is intended to cause harm. The Court found this exercise to be “completely lacking” in each of the impugned orders, which had instead rejected the applications “under the influence of a singular fact”  namely that the inventions pertained to aerosol-generating substrates or devices or to tobacco or nicotine  by classifying them under the ENDS Act’s definition of “e-cigarette” and applying the statutory ban without further inquiry.
5. The Court extensively relied on three decisions of the Calcutta High Court  ITC Limited v. The Controller of Patents Designs and Trademark, MANU/WB/1167/2025; ITC Limited v. The Controller of Patents, Designs & Trademark, MANU/WB/0990/2025; and R J Reynolds Tobacco Company v. The Controller General of Patents Designs and Trademarks and Anr., IPDPTA/31/2023 decided on 16.04.2025  all of which had addressed the same recurring pattern of Section 3(b) refusals premised on the ENDS Act or on an unsubstantiated, preconceived notion that tobacco or nicotine products are inherently harmful. These decisions established the following principles, which the Court adopted: Section 3(b) is based on an “intent principle” and not an “effect or harm” principle, such that the focus must be on the primary or intended use of the invention rather than on a generalised harm associated with the broader category of product to which it belongs; the Patent Office’s own “Manual of Patent Office Practice and Procedure” does not list tobacco, smoking or nicotine-related inventions among its illustrative examples of inventions falling within Section 3(b); the ENDS Act deals with the sale, manufacture, import and export of electronic cigarettes and does not deal with the grant or refusal of patents and reliance on it as a ground for refusing a patent application  particularly where this ground was not earlier raised in the FER or hearing notice  is impermissible; the grant of a patent does not, as a matter of law, confer an affirmative right to sell or commercialise the invention, since patent rights are exclusionary or negative rights that merely permit the patentee to prevent third parties from exploiting the invention without consent, by virtue of Section 48 of the Patents Act; and findings that an invention is “contrary to public order and morality” or causes “serious prejudice” to human health, made without independent scientific or technical evidence, are unreasoned, cryptic and unsustainable.
6. The Court accepted the appellant’s submission, also drawn from the Calcutta High Court’s decisions, that India being a member of the Paris Convention and the TRIPS Agreement, the Controller was obliged to have regard to Article 4quarter of the Paris Convention (which provides that a patent shall not be refused or invalidated on the ground that the sale of the patented product is subject to restrictions resulting from domestic law) and to Article 27.2 of TRIPS (which permits exclusion from patentability on grounds of ordre public, morality or serious prejudice to health or the environment, provided the exclusion is not made merely because exploitation is prohibited by domestic law). Reliance was also placed on Section 83(d) and (e) of the Patents Act, 1970, which provide that patents granted should not impede protection of public health and should act as an instrument to promote public interest and that patents granted do not in any way prohibit the Central Government from taking measures to protect public health  indicating that the grant of a patent and the State’s separate regulatory power to restrict commercial exploitation of a product operate on distinct planes.
7. The Court held that the Controller had also erred by failing to consider two further important points consistently raised by the appellant: first, that government policies, statutes and prohibitions are inherently subject to change and there is every possibility that the prohibition under the ENDS Act may be wholly or partly lifted in the future, such that refusal of a patent application at this stage on the strength of a potentially impermanent statutory prohibition risks causing irreparable damage to the appellant if the prohibition is later modified; and second, that a patent is a negative right which does not automatically entitle the patentee to use or sell the patented product or process, but only to prevent third parties from doing so without permission, such that grant of the patent at this stage would not, by itself, authorise any commercial exploitation in contravention of the ENDS Act.
8. The Court found specific merit in the appellant’s contention that the Controller had, in several of the orders, given a categorical finding that traditional combustible cigarettes “may not” fall within the scope of Section 3(b)  and yet had refused applications relating to devices that reduce or eliminate combustion (such as e-cigarettes, heat-not-burn devices and aerosol-generating devices) on the premise that they nonetheless cause serious prejudice, without reconciling this apparent inconsistency and without explaining why a device designed to reduce harm relative to a product found not to fall within Section 3(b) should itself be treated as falling within that provision. The Court noted this inconsistency was particularly stark in the case of C.A. (COMM.IPD-PAT) 61/2024, where the claimed invention used a substantially tobacco-free aerosol-generating film and yet the application was refused on the speculative and unsubstantiated ground that inhalation of any substance, including nicotine without tobacco, may carry inherent health risk  a finding the Court found to be in direct tension with the Controller’s own acknowledgment elsewhere in the same order that the absence of tobacco reduces harm relative to conventional cigarettes.
9. The Court held that nicotine-related inventions cannot be refused on a blanket, undifferentiated basis, given that Nicotine Replacement Therapies are approved by the US Food and Drug Administration for smoking cessation, that nicotine patches, gums and lozenges are among the most common over-the-counter smoking cessation medicines and that India’s own Ministry of Health and Family Welfare has included Nicotine Replacement Therapy in the National List of Essential Medicines under the category “Medicines for disorders due to psychoactive substance abuse.” The Court further noted the specific disclosure in C.A. (COMM.IPD-PAT) 6/2024 that nicotine salicylate, nicotine fumarate and nicotine mono-pyruvate disclosed in the specification have established or proposed medicinal applications including fever relief, anti-inflammatory and analgesic use, treatment of multiple sclerosis and treatment of chronic obstructive pulmonary disease or weight management  none of which had been addressed in the impugned order.
10. On the specific facts of C.A. (COMM.IPD-PAT) 28/2024, the Court found additional and independent infirmities: the impugned order erroneously recorded a submission attributed to the appellant  that providing nicotine without tobacco to reduce withdrawal symptoms is a “myth”  which the appellant had never made either in its FER reply or in its written submissions, demonstrating non-application of mind; and, more seriously, the impugned order in this appeal was found to be a “cut-copy-paste” of the order impugned in C.A. (COMM.IPD-PAT) 6/2024, a wholly distinct application relating to a different invention.
11. On C.A. (COMM.IPD-PAT) 27/2025 specifically, the Court accepted the appellant’s submission that the Controller had erroneously relied on the WHO and ICMR reports  both concerned specifically with Electronic Nicotine Delivery Systems  despite the claimed invention relating to a method of manufacturing tobacco cut filler with improved filling power and reduced tobacco dust, a technical field unrelated to electronic nicotine delivery. The Court noted that reliance on the ENDS Act and the Cigarettes and Other Tobacco Products Act, 2003 had been introduced for the first time in the impugned order, without having been raised in the FER or the hearing notice and that the Controller had nowhere discussed how the specific technical advance claimed  improved filling power of the tobacco cut filler  would itself cause serious prejudice, despite acknowledging elsewhere that the primary and intended use of the invention was not to cause such prejudice.
12. Having found these cumulative infirmities across all eight appeals  comprising violations of natural justice in two of the appeals, a recurring and fundamental misapplication of Section 3(b) in seven of the appeals, failure to engage with material written submissions, failure to apply settled principles of international treaty law and instances of clear non-application of mind including a duplicated order  the Court held that this batch of appeals made out a fit case for remand rather than final adjudication on the merits in this Court. The Court accordingly partially allowed all eight appeals, set aside all eight impugned orders and remanded each matter to the respective Controller for fresh consideration, taking into account the written submissions filed by the appellant in each matter and after granting a fresh opportunity of hearing. Decisions on remand were directed to be taken within five months from the date of the order and were required to be reasoned and speaking orders. The Court expressly clarified that it had not expressed any opinion on the merits of any of the cases.

STATUTORY PROVISIONS INVOLVED

Section 3(b) of the Patents Act, 1970 provides that an invention the primary or intended use or commercial exploitation of which could be contrary to public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment, is not an invention within the meaning of the Act and is therefore non-patentable. This was the central provision in dispute across seven of the eight appeals. The Court held that this provision is grounded in an “intent principle” rather than an “effect or harm principle”  meaning the focus of inquiry must be the primary or intended use of the claimed invention, assessed on cogent and scientific evidence and not a generalised harm attributed to a broader category of product. The expression “serious prejudice” is not defined in the Act and the Court held that its application requires demonstration through scientific analysis specific to the invention in question, rather than reliance on a preconceived or unsubstantiated notion that any invention touching upon tobacco, nicotine or aerosol-generating technology is inherently harmful.

Section 117A of the Patents Act, 1970 provides for appeals to the High Court against decisions, orders or directions of the Controller, including refusals of patent applications under Section 15. All eight appeals were filed under this provision, each appellant having exhausted the examination and hearing process before the respective Controller before the application was refused.

Section 15 of the Patents Act, 1970 empowers the Controller to refuse an application for patent or to require amendment of the application, specification or other documents, where the Controller is not satisfied that the requirements of the Act have been met. The impugned order in C.A. (COMM.IPD-PAT) 49/2024 was specifically passed under this section refusing the application on the ground of non-patentability under Section 3(b).

Section 48 of the Patents Act, 1970 provides that the grant of a patent confers upon the patentee the exclusive right to prevent third parties from making, using, offering for sale, selling or importing the patented product or product obtained by the patented process without the patentee’s consent  characterising patent rights as exclusionary or negative rights rather than as affirmative rights of commercial exploitation. The Court relied on this provision to hold that grant of a patent would not, of itself, authorise the appellant to manufacture or sell any product in contravention of the ENDS Act and that the Controller had erred in proceeding on the implicit assumption that grant of a patent would confer such an affirmative right.

Section 4 of the Patents Act, 1970 excludes inventions relating to atomic energy from patentability. The Court noted this as the sole instance in the Act of patentability being made contingent on a subject-matter-specific statutory exclusion linked to government policy, in contrast with the absence of any comparable express exclusion for tobacco, nicotine or e-cigarette-related inventions.

Section 83(d) and (e) of the Patents Act, 1970 sets out general principles applicable to the working of patented inventions, including that patents granted should not impede protection of public health and nutrition and should act as an instrument to promote public interest, particularly in sectors of vital importance for socio-economic and technological development and that patents granted do not in any way prohibit the Central Government from taking measures to protect public health. The Court relied on this provision, as adopted from the Calcutta High Court’s reasoning, to underscore that the grant of a patent and the State’s continuing power to regulate or restrict the commercial exploitation of a patented product operate independently of one another.

The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019 (“ENDS Act”) prohibits the production, manufacture, import, export, transport, sale, distribution, storage and advertisement of electronic cigarettes in India and defines “electronic cigarette” broadly to include Electronic Nicotine Delivery Systems, Heat Not Burn Products, e-Hookah and similar devices, while expressly excluding products licensed under the Drugs and Cosmetics Act, 1940. The Court held that this Act regulates commercial conduct relating to electronic cigarettes and does not deal with and cannot determine, the grant or refusal of a patent under the Patents Act, 1970, which the Court emphasised is a complete code in itself. Reliance on the ENDS Act as the sole or principal basis for refusing patent applications under Section 3(b), particularly where this ground was introduced without prior notice to the applicant, was held to be erroneous.

Article 4quarter of the Paris Convention for the Protection of Industrial Property provides that the grant of a patent shall not be refused and a patent shall not be invalidated, on the ground that the sale of the patented product or of a product obtained by a patented process is subject to restrictions or limitations resulting from domestic law. The Court held that India, being a member of the Convention, was obliged to have regard to this principle and that the Controller’s reasoning  treating the ENDS Act’s domestic prohibition as itself a ground for patent refusal  was in tension with this Article.

Article 27.2 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) permits member states to exclude inventions from patentability where prevention of commercial exploitation is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, but expressly provides that such exclusion must not be made merely because exploitation is prohibited by domestic law. The Court held that the impugned orders, in relying essentially on the existence of the domestic ENDS Act prohibition rather than on an independent assessment of serious prejudice to health, ran contrary to the proviso in this Article.

Article 51(c) of the Constitution of India provides that the State shall endeavour to foster respect for international law and treaty obligations in the dealings of organised peoples with one another. This provision was cited by the appellant in support of the argument that domestic patent administration should be informed by India’s treaty commitments under the Paris Convention and TRIPS.

REASONING OF THE COURT

The Court’s reasoning across this batch of appeals proceeded by first separating the natural justice ground  relevant to only two of the eight appeals  from the substantive Section 3(b) ground common to seven of the eight appeals and then conducting a unified analysis of the latter before applying its conclusions to the specific facts of each appeal.

On natural justice, the Court’s reasoning was straightforward and followed directly from settled precedent: an applicant cannot be expected to respond to documents or objections of which it was never informed prior to the final decision. The introduction of nine substantive documents for the first time in the final order  bypassing both the FER and the hearing notice stages at which objections are ordinarily required to be raised  left the appellant with no meaningful opportunity to engage with the material relied upon to refuse the application. This procedural failure, on its own, was sufficient to vitiate the impugned orders in C.A. (COMM.IPD-PAT) 6/2024 and 28/2024.

On the substantive Section 3(b) ground, the Court’s reasoning proceeded through several layers.

• First, the Court accepted that Section 3(b) does serve a legitimate purpose raising the threshold for patentability where an invention’s primary or intended use may cause serious harm  but insisted that this threshold must be applied through a genuine, evidence-based, scientific inquiry into the specific invention before the Controller, not through a categorical or class-based exclusion of any invention that happens to relate to tobacco, nicotine or aerosol-generating technology. The Court found that, across the impugned orders, the Controller had repeatedly substituted a generalised, policy-driven conclusion  that products falling within the ENDS Act’s definition of “electronic cigarette” are barred under Section 3(b)  for the individualised scientific assessment that the provision actually demands.
• Second, the Court reasoned that the ENDS Act and the Patents Act, 1970 operate on entirely different planes: the former regulates commercial conduct (manufacture, sale, distribution) in India, while the latter governs the grant of exclusionary intellectual property rights, which do not themselves authorise any commercial exploitation. Since a patent is a negative right under Section 48, granting a patent for an aerosol-generating device or nicotine delivery system would not, by itself, permit the patentee to manufacture or sell that device in violation of the ENDS Act. The two statutory schemes can therefore coexist without conflict and the existence of a domestic prohibition on sale is not, under Article 4quarter of the Paris Convention, a valid ground to refuse the patent itself.
• Third, the Court drew heavily on the persuasive value of contemporaneous decisions of the Calcutta High Court addressing the identical pattern of refusals  also concerning Philip Morris and other tobacco-industry applicants, also premised on the ENDS Act and an unsubstantiated assumption of harm. The convergence of reasoning across two High Courts, each independently identifying the same defects (absence of scientific evidence, reliance on an “effect or harm” rather than “intent” principle, failure to engage with treaty obligations and conflation of patent grant with a right of commercial exploitation), lent considerable weight to the Court’s conclusion that these were not isolated errors specific to a single Controller’s order but a systemic pattern requiring correction.
• Fourth, the Court engaged closely with the internal inconsistencies within several of the impugned orders themselves  most strikingly the acknowledgment, in multiple orders, that conventional combustible cigarettes “may not” fall within Section 3(b), juxtaposed against the refusal of patent protection for devices specifically designed to reduce the harms associated with combustion. The Court treated this inconsistency as itself evidence that the Controller’s reasoning was not grounded in a coherent, evidence-based application of Section 3(b), but in an undifferentiated suspicion of the broader technological category.
• Fifth, in evaluating the appropriate remedy, the Court was conscious that the merits of patentability  novelty, inventive step, sufficiency of disclosure and ultimately whether each invention’s primary or intended use causes serious prejudice to health  had not been properly examined by the Controller in the first instance and it would not be appropriate for the Court itself to undertake that fact-intensive, scientific evaluation for the first time on appeal. The Court therefore consistently opted for remand across all eight appeals, directing fresh consideration with explicit directions that the decisions be reasoned, speaking orders rendered within a fixed time frame, while expressly disclaiming any view on the ultimate merits.

DOCTRINAL SIGNIFICANCE

This batch judgment makes an important and wide-ranging contribution to Indian patent jurisprudence concerning the proper scope and application of Section 3(b) of the Patents Act, 1970, particularly in the rapidly developing and contentious field of tobacco harm-reduction technology, aerosol-generating devices and nicotine delivery systems.

The most significant doctrinal contribution is the Court’s firm endorsement of the “intent principle” over the “effect or harm principle” in construing Section 3(b)  meaning that the provision requires an evidence-based inquiry into the primary or intended use of the specific claimed invention, rather than a categorical exclusion of inventions falling within a broader class of technology (such as e-cigarettes or nicotine delivery systems) presumed to be harmful. This principle, adopted in convergence with multiple decisions of the Calcutta High Court, establishes a coherent and demanding evidentiary standard that Controllers must meet before invoking Section 3(b) and significantly curtails what the judgment itself describes as the risk of “arbitrariness” arising from “unfettered discretion” exercised “purely on whims and fancies” when patent applications relate to politically or socially sensitive subject matter.

The judgment also makes a significant contribution by clarifying the relationship between sector-specific regulatory prohibitions (such as the ENDS Act) and the patent grant process. The Court’s holding that the Patents Act is a “complete Code” and that statutory prohibitions on commercial conduct cannot, without more, determine patentability under Section 3(b)  combined with the invocation of Article 4quarter of the Paris Convention and the negative-right character of patents under Section 48  provides a clear analytical framework for distinguishing the question “is this conduct currently lawful to carry out in India” from the distinct question “does this invention’s primary or intended use cause serious prejudice to health.” This distinction is likely to have considerable practical significance for innovators in regulated industries generally, not merely the tobacco sector, wherever an invention’s commercial exploitation is subject to evolving regulatory restriction.

The judgment’s treatment of international treaty obligations  Article 4quarter of the Paris Convention and Article 27.2 of TRIPS  as relevant interpretive aids for Section 3(b), reinforced by Article 51(c) of the Constitution, is also a notable contribution, signalling that Indian patent administration should not proceed in isolation from India’s international commitments, particularly where domestic legislative prohibitions risk being conflated with patent-law exclusions in a manner inconsistent with treaty obligations.

The judgment’s reiteration of the natural justice principle  that no new documents or grounds may be introduced for the first time in a final order without having first been notified at the FER or hearing-notice stage  continues a consistent and now well-settled line of authority from this Court (Otsuka Pharmaceutical, Perkinelmer Health) and the Calcutta High Court (ITC Limited), reinforcing procedural discipline in patent examination and opposition proceedings generally, beyond the specific context of tobacco-related inventions.

Finally, the judgment is notable for its candid identification of an instance of apparent administrative carelessness  the “cut-copy-paste” of an order from one unrelated application to another  which underscores the importance of individualised, application-specific reasoning in patent refusal orders and signals to the Patent Office the consequences of formulaic or templated decision-making in this sensitive and commercially significant area.

The judgment must, however, be read as a batch of remand orders and not as a final determination on the patentability of any of the eight inventions. The Court expressly declined to express any view on the merits  including whether each invention does or does not, on a proper scientific assessment, cause serious prejudice to human health  leaving all such questions to be determined afresh by the respective Controllers within the time frame directed.

Reference :-  https://indiankanoon.org/doc/54574049/

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