Taiho Pharmaceutical Co Ltd vs The Controller of Patents

By Aastha Suri and Nishu Aditya

Introduction

In the recent case of Taiho Pharmaceutical Co Ltd vs The Controller of Patents, an appeal was filed by the Taiho Pharmaceutical Co. Ltd. under Section 117A of the Patents Act, 1970 and is directed against impugned order passed by the Controller of Patents and Designs (“Learned Controller” hereafter) vide order dated June 18, 2021, wherein the Learned Controller has refused the Indian Patent Application No. 7283/DELNP/2014 titled ‘Novel Piperidine Compound or Salt thereof’ on grounds of lack of inventive step (Section 2(1)(ja)) and non-patentability under Section 3(d).

This case specifically addresses the interpretation and application of Section 3(d) of the Patents Act, 1970, which sets a higher standard for patentability of pharmaceutical substances. The judgement provides important guidance on how the Patent Office should apply Section 3(d) and the procedural requirements for raising objections under this section.

A brief overview of the matter:

The Taiho Pharmaceutical Co. Ltd. is an entity based in Japan. The appellant had filed a national-phase application (7283/DELNP/2014) dated August 29, 2014 under the Patent Cooperation Treaty (‘PCT’), claiming priority from a Japanese Patent Application dated August 27, 2012.  The appellant had filed a request for examination of the said Indian application on August 29, 2014. The application was published by the Patent Office on April 24, 2015. The First Examination Report (“FER” hereafter) was issued on March 28, 2018. The following substantive objections were raised by the Controller via the said FER:

• Lack of inventive step under Section 2(1)(ja)of the Act;
• Non patentable under Section 3(d)and 3(i) of the Act.

The appellant submitted a detailed response against the objection raised in the FER vide letter dated September 20, 2018. The Learned Controller considered the arguments submitted by the appellant regarding Section 3(i) of the Indian Patents Act. Thereafter, a hearing was scheduled on November 18, 2019, and post hearing, written submissions along with amended claims were filed by the appellant on December 29, 2019. Subsequently, the impugned order was passed by the Learned Controller on June 18, 2021, rejecting the grant of Patent application on the ground of lack of inventive step under Section 2(1)(ja) and non-patentability under  of the Act.

Rejection of Patent application:

The Learned Controller, in the impugned order rejected the grant of patent application on the ground of lack of inventive step under Section 2(1)(ja) and non-patentability under Section 3(d) of the Act.

Lack of Inventive Step under Section 2(1)(ja):

The Learned Controller stated that the claimed substituted piperidine compounds of the Indian application (7283/DELNP/2014) share the same core structure as those disclosed in the cited document D1, exhibit Aurora A kinase inhibitory activity. Compounds 15 and 16 of the cited document D1were specifically noted to closely resemble the claimed compounds. Given this similarity, a Person Skilled in the Art would consider the claimed compound to be an obvious variation of those in the cited document D1. Therefore, the claims were considered to lack an inventive step.

Lack of non-patentability under Section 3(d):

The Appellant compared the activity of the claimed compounds with Paclitaxel, a chemotherapy agent, which is unrelated in structure and the structurally closest compounds were disclosed in the cited document D1, which shared the same core structure and were responsible for the desired biological activity. Consequently, the claimed compounds were considered mere derivatives of known substances from the cited document D1. Since the applicant fails to demonstrate enhanced therapeutic efficacy over the known substances disclosed in the cited document D1. Thus, the claimed invention was held to be a non-patentable subject matter under Section 3(d).

Appeal filed by the Appellant

The Appellant in this case raised the following points while challenging the Learned Controller’s reasoning:

• Regarding the objection of inventive step, the appellant stated that the closest cited document D1 fails to provide a clear and explicit suggestion on how the PSITA should be directed towards the claimed invention.
• The specific examples 15 and 16 of the cited document D1 lack of a halogen atom or alkoxy group at the R2 (3-position), instead containing lower alkyl groups or X3 in D1.
• The presence of R2 in the claimed compound of the subject patent application enhances oral absorbability and also increases therapeutic efficacy as compared to the cited document
• Regarding the objection of non-patentability under Section 3(d), the Learned Controller failed to clearly specify the ‘known substance’ in the cited document D1.
• The Learned Controller overlooked the enhanced efficacy data provided in Table 21 of the complete specification of the subject patent application, which demonstrates the increased oral absorbability of the claimed compounds.
• The issuance of corresponding patents in major jurisdictions sustains the patentability of the application. Patent applications corresponding to the subject patent application have been granted in major jurisdictions, thereby confirming the patentability of the subject patent application.
• The reliance on the judgment in DS Biopharma Ltd. v. Controller of Patents & Designs (DS Biopharma) is justified, as the Court outlined the procedures that the Indian Patent Office (IPO) must follow prior to invoking Section 3(d) of the Patents Act. In the DS Biopharma case, the Delhi High Court established a significant precedent by ruling that the Learned Controller must specifically identify the ‘known substance’ when raising objections under Section 3(d). The Court emphasized that patent applicants must be given a fair opportunity to demonstrate enhanced efficacy over the identified known substance. This landmark decision established a three-part test requiring the Learned Controller to clearly identify: (1) the specific ‘known’ substance with ‘known efficacy’; (2) how the claimed substance is a derivative or new form of the known substance; and (3) the basis for comparing therapeutic efficacy between the claimed and known substances. The DS Biopharma judgment has become a cornerstone for procedural fairness in pharmaceutical patent examinations in India. .

The appellant also argued that the Learned Controller failed to provide a proper opportunity to respond to the Section 3(d) objection, as the ‘known substance’ was not clearly identified in the hearing notice.

Learned Counsel of the Respondent appearing on behalf of the respondent, made the following submissions:

• The claimed compound in the subject patent application shares identical core chemical structures has already been disclosed in the cited document D1. The only modification introduced in the application pertains to the derivatization performed at the positions R1, R2, R3, and R4 of the molecule. This seems to be an obvious choice from a limited range of similar substitutes as disclosed in D1, such as compounds15 and 16. Consequently, the claimed compounds do not demonstrate an inventive step and fail to meet the criteria outlined in Section 2(1)(ja) of the Act.
• The comparison activities provided by the appellant of the claimed compounds with Paclitaxel is not related to the compounds claimed in the subject patent application. The claimed compounds are derivatives of the known substances from prior art D1. A novel form of a known substance from prior art D1, which does not lead to an improvement in the established efficacy of that substance, is regarded as the same substance. Therefore, the subject matter of claims 1-14 falls within the scope of Section 3(d) of the Act.

Judgment passed by the High Court:

The Hon’ble Court referred to the Supreme Court judgment in Novartis AG v. Union of India, observing that Section 3(d) establishes a more stringent criterion for the patentability of pharmaceutical and chemical substances compared to the general standard outlined in Section 2(1)(j). Section 3(d) plays a vital role in evaluating the patentability of pharmaceutical or chemical substances, particularly emphasizing the concept of a ‘new form of a known substance.

The court also cited the DS Biopharma order, reiterating its pertinent excerpts:

• What is the specific ‘known’ substance in question?
• How and why is the claimed molecule(s) or substance(s) is a derivative or otherwise a new form of a known substance? and
• What is the basis for asserting that the alleged ‘known’ substance and the claimed molecule or substance possess the same ‘known’ efficacy?

The Learned Controller in the hearing notice has not identified any of the aforementioned three factors. The Appellant also contends that without the identification of the ‘known’ compound, it is unable to respond adequately to this objection, which significantly impairs its right to receive a fair opportunity to defend its patent application. Furthermore, it asserts that it has no legal obligation under Section 3(d) of the Act to prove the efficacy of the claimed compound when the ‘known’ compound has not been identified.

The Hon’ble Court acknowledged that the principles established in DS Biopharma are entirely relevant to the facts and circumstances of the current case. The Hon’ble Court emphasized that the Learned Controller must provide a clear identification of the ‘known substance’ and a reasoned explanation in the hearing notice to allow the applicant a fair opportunity to respond to Section 3(d) objections.

Upon comprehensive consideration, the Hon’ble Court found that appellant had not been granted a sufficient opportunity to respond to the objection under Section 3(d), as the objection was introduced for the first time in the hearing notice without any clarification regarding its applicability to the claimed invention. The Hon’ble Court ruled that in order to uphold an objection under Section 3(d) of the Patents Act, the Learned Controller must clearly identify the following factors in the hearing notice, thereby providing the appellant with a reasonable opportunity to respond:

• The ‘known substance’ with ‘known efficacy’;
• A clear explanation of how and why the claimed substance is a derivative or otherwise a new form of a ‘known substance’; and
• An objective comparison between the therapeutic efficacy of the claimed substance and that of the ‘known’ substance.

In light of the analysis above, the Hon’ble Court held that the Learned Controller’s rejection under Section 3(d) of the Act was not sustainable.

Concerning the objection under Section 2(1)(ja) of the Act, the Learned Controller, in the contested order, has based his decision on the closest cited document D1, specifically citing Examples 15 and 16 as the nearest compounds. Given that the reasoning under Section 2(1)(ja) of the Act, which addresses the absence of an inventive step, is closely linked to the evaluation under Section 3(d) of the Act, the objection under Section 2(1)(ja) also necessitates reevaluation following the accurate identification of the ‘known substance’ from the closest prior art and a comparison of the enhanced efficacy data provided by the appellant.

Therefore, when reassessing the objection under Section 3(d), any research data that demonstrates enhanced therapeutic efficacy, if presented by the appellant, should also be appropriately considered during the evaluation of the inventive step under Section 2(1)(ja) of the Act. 20.

In view of the preceding analysis, the contested order is invalid as stated above, and the case is referred back to the Patent Office for renewed consideration. The Learned Controller will provide a new opportunity for a hearing prior to making a decision on the subject patent application, after issuing a hearing notice to the appellant. It is important to note that the new order issued by the Learned Controller will address the valid arguments presented on behalf of the appellant. The current appeal is resolved in accordance with the aforementioned.

Conclusion:

 The Hon’ble court disposed of the appeal by setting aside the Learned Controller’s order and remanded case back to the Patent Office for fresh consideration. The Hon’ble Court directed that the Learned Controller should provide a new opportunity for hearing to appellant after issuing a proper hearing notice that clearly identifies the ‘known substance’ and explains how Section 3(d) is applicable.

The Taiho Pharmaceutical case represents a significant development in Indian patent law, particularly regarding the application of Section 3(d) to pharmaceutical inventions. The Delhi High Court’s decision underscores the importance of procedural fairness and transparency in patent examination processes.

By requiring the Patent Office to clearly identify the ‘known substance’ and provide a reasoned explanation when raising Section 3(d) objections, the Hon’ble Court has set a higher standard for patent examination. This approach strikes a balance between encouraging pharmaceutical innovation and preventing ever greening of patents.

The judgment also highlights the judiciary’s role in ensuring that patent laws are applied consistently and fairly. By remanding the case for fresh consideration, the Hon’ble Court has given Taiho Pharmaceutical an opportunity to properly address the Section 3(d) objections, while also providing guidance to the Patent Office on how to conduct such examinations in the future.

This decision may have far-reaching implications for pharmaceutical patent applications in India. It may lead to more thorough and transparent examination processes, potentially resulting in higher-quality patents and reduced litigation. However, it may also increase the workload for patent examiners and potentially extend the timeline for patent grants.

Overall, this case reinforces India’s unique approach to pharmaceutical patents, balancing innovation incentives with public health concerns. It will be interesting to see how this decision influences future patent examinations and litigation in the pharmaceutical sector[1]

[1] https://indiankanoon.org/doc/154120720/