Patent Applications Cannot Be Rejected on Vague and Superficial Grounds: Bombay High Court Quashes Controller’s Order, Directs Fresh Hearing

A Patent Cannot Be Denied Without Proper Reasoning – The Decision Must Engage With Facts and Law - In a significant judgment Bombay High Court set aside the Controller of Patents and Designs’ order, which had refused a patent application filed by Euro-apex B.V. for a Heat Transfer Assembly for a Heat Exchanger. The Court ruled that the Controller’s order lacked reasoning, failed to consider crucial documents, and unjustly dismissed the application without addressing material facts. Calling the order "cryptic and unsustainable," the Court directed a fresh hearing before a different officer to ensure fairness and transparency.

Observing the procedural lapses in the decision-making process, the Court remarked, "Patent applications involve complex legal and technical considerations. A refusal order that does not analyze the issues and merely states conclusions cannot stand judicial scrutiny."

"Patent Office Ignored Critical Evidence of Ownership Transfer – Order Based on Flawed Assumptions"

The dispute arose from a license agreement signed in 1993 between Euro-apex B.V. and Shinhan Apex Corporation, under which Shinhan Apex Corporation was allowed to manufacture and sell the patented technology in South Korea. Following disputes between the parties, the agreement was terminated on February 22, 2008, and a five-year confidentiality clause was imposed on Shinhan Apex Corporation.

Despite this, Shinhan Apex Corporation filed a patent application in Korea on July 9, 2008, and in India on October 6, 2008, using the same confidential technology. Euro-apex B.V. challenged these applications, arguing that the patent rights belonged to them and that Shinhan Apex Corporation had breached its confidentiality obligations.

The dispute was resolved in arbitration before the Netherlands Arbitration Institute, which ruled in favor of Euro-apex B.V. on December 23, 2011. The arbitrator held that Shinhan Apex Corporation had illegally filed the patent application and ordered that all rights be transferred to Euro-apex B.V.. Following this ruling, a Deed of Assignment was executed on April 4, 2012, formally transferring the Indian patent application to Euro-apex B.V.

However, despite this clear legal transfer of rights, the Controller of Patents refused the application on July 13, 2021, citing issues with the assignment document and claiming that there was a change in the inventor's name without proper justification.

"Unjustified and Arbitrary – The Patent Office Ignored Its Own Records and the Arbitration Award"

Euro-apex B.V. challenged the refusal, arguing that the Controller had completely ignored the Deed of Assignment and the arbitration award, which legally established their right over the patent. The High Court found that the Patent Office had acted arbitrarily by disregarding these crucial documents.

The Court observed, "If the Patent Office had reviewed its own records, it would have found clear evidence that Euro-apex B.V. was the rightful applicant. The failure to consider these key documents amounts to a violation of natural justice and renders the refusal unsustainable."

The High Court also noted that the objection regarding the inventor’s name change was never raised during the examination process and was suddenly introduced at the refusal stage. Criticizing this approach, the Court stated, "Patent examination cannot be conducted in an inconsistent manner where new objections are introduced at different stages without allowing the applicant a fair opportunity to respond."

"Withdrawing a Pre-Grant Opposition Does Not Bar a Valid Patent Claim"

The Controller of Patents had also relied on the fact that Euro-apex B.V. had previously filed a pre-grant opposition against the same patent, arguing that this disqualified them from later claiming ownership. The High Court rejected this reasoning, holding that "a party is well within its rights to withdraw a pre-grant opposition and later seek a patent if it becomes the rightful owner."

Citing UCB Farchim SA vs. Cipla Ltd. (2010) and Novartis AG vs. Natco Pharma (2024), the Court reaffirmed that "a pre-grant opposition is a procedural safeguard to assist the examination process, not an absolute bar to future claims by the opposing party."

"Patent Applications Must Be Evaluated on Their Merits, Not Rejected Based on Superficial Observations"

Quashing the Controller’s refusal order, the Bombay High Court ruled that the entire case must be reconsidered by a different officer to ensure a fair and unbiased decision. The Court observed, "The impugned order does not engage with the crucial facts of the case. A patent application must be examined based on legal and technical merits, not dismissed with vague and arbitrary justifications."

Ordering a fresh hearing, the Court directed the Patent Office to assign the matter to a different officer and issue a final decision within six months.

This ruling reaffirms the importance of transparency and procedural fairness in the patent granting process. By setting aside the arbitrary refusal order, the Court has reinforced that patent rights must be determined through a proper legal and technical analysis, not dismissed based on flawed assumptions or incomplete reasoning. The decision ensures that legitimate patent holders are not deprived of their rights due to bureaucratic inefficiencies and legal misinterpretations.

Date of decision: 11/03/2025