Delhi High Court Sets Aside Nippon Steel Patent Rejection, Says Orders Must Give Reasons

The Delhi High Court has set aside the refusal of a patent application filed by Nippon Steel Corporation, holding that an order which merely reproduces prior art documents without analyzing the claimed invention or giving reasons cannot be sustained in law.

A bench of Justice Tushar Rao Gedela emphasised that patent authorities act as quasi-judicial bodies and must pass reasoned orders. “It is apparent that the Assistant Controller/Controller are quasi judicial authorities from whom it is expected that the orders shall contain reasons for either acceptance or refusal. Any order which has no reasoning cannot become the bedrock of a decision of this nature. In that view of the matter, this Court is of the considered view that the impugned order is unsustainable in law and is quashed and set aside,” the Court said.

The case arose from a patent application filed by Nippon Steel Corporation for an invention titled “PROCESS FOR PRODUCTION OF UNIDIRECTIONAL ELECTROMAGNETIC STEEL SHEET.” The application was filed in India on November 23, 2012, following earlier filings in Japan and through the PCT route.

The invention relates to a process for manufacturing grain-oriented electrical steel sheets using specified heating, rolling and cooling techniques.

A First Examination Report issued on June 1, 2018, raised multiple objections, including lack of novelty, lack of inventive step, lack of industrial applicability, lack of unity of invention, insufficiency of disclosure, and an objection under Section 3 of the Patents Act. The applicant responded through detailed written submissions and participated in a hearing on February 4, 2020, followed by post-hearing submissions.

However, by an order dated May 26, 2020, the Controller of Patents refused the application on the ground of lack of inventive step under Section 2(1)(ja) of the Patents Act, relying on prior art documents D1, D2 and D3.

Challenging the refusal, the appellant argued that the order violated principles of natural justice as it largely reproduced extracts from prior art documents without engaging with the submissions made on its behalf.

It was further contended that the Controller failed to give any reasons for the conclusion reached, rendering the order unsustainable.

Upon examining the impugned order, the Court found that the “Scientific and Technical Analysis” consisted largely of verbatim reproduction of the cited prior art documents. It observed that the analysis showed no application of mind and lacked any reasoning capable of supporting the conclusion.

Relying on its earlier ruling in Agriboard International LLC vs Deputy Controller of Patents and Designs, the Court reiterated that while assessing inventive step, the Controller must examine the prior art, the claimed invention, and explain how the invention would be obvious to a person skilled in the art. The Court noted that this essential exercise was entirely missing in the present case.

Finding the order legally unsustainable, the court quashed the refusal and remitted the matter for fresh consideration.

It directed that the application be placed before a different Controller and be decided within four months, after affording the appellant an opportunity of hearing.

The court clarified that it had not examined the merits of the invention and directed that the application be decided independently in accordance with law.

For Petitioner: Advocates Vineet Rohilla and Rohit Rangi, 

For Respondents: SOC Sumit Nagpal, with Advocates Tanmay Saini and  Kunal Khurana