The case of ITC Limited v. The Controller of Patents, Designs & Trademarks involves a critical examination of the boundaries of patentability under Indian law, particularly the interpretation of Section 3(b) of the Patents Act, 1970. The core issue centered on whether a device intended for generating and delivering nicotine aerosol, based purely on chemical reactions without the use of electronics or combustion, could be denied a patent on public health grounds.

Factual Background: The appellant, ITC Limited, filed Indian Patent Application No. 685/KOL/2015 dated 10th June 2015 for an invention titled "A Device and method for generating and delivery of a Nicotine Aerosol to a user." The claimed device featured a chemical reaction-based mechanism for delivering nicotine, comprising a tube with components containing an aerosol-generating substance (like nicotine) and an aerosol-promoting substance (like pyruvic acid). Notably, the device did not involve electrical or electronic components and thus, according to ITC, did not qualify as an Electronic Nicotine Delivery System (ENDS) or e-cigarette.

Procedural Background: The Patent Office initially issued a First Examination Report (FER) that did not include any objection under Section 3(b) of the Patents Act. However, in the hearing notice dated 1st May 2023, an objection under Section 3(b) was introduced for the first time. The Controller subsequently passed an order on 26th June 2023 rejecting the patent application on the grounds that the invention was contrary to public order and morality and posed serious prejudice to health. ITC appealed under Section 117A of the Patents Act to the High Court of Calcutta.

Legal Issue: The central legal issue was whether the Controller's rejection of the patent application under Section 3(b) of the Patents Act, 1970—based on documents and statutory materials not disclosed in advance to the appellant—violated the principles of natural justice and whether the application indeed fell within the scope of prohibited subject matter under Section 3(b)?

Discussion on Judgments: The appellant relied on several judicial precedents to challenge the procedural fairness and legal reasoning in the Controller's order. Most notably: Ssangyong Engineering and Construction Co. Ltd. v. National Highways Authority of India, 2019 SCC OnLine SC 677: Relied upon to argue that reliance on documents not supplied to the party prior to decision-making violates principles of natural justice and the right to present one's case. Balsinor Nagrik Co-op. Bank Ltd. v. Babubhai S. Pandya, AIR 1987 SC 849: Cited to stress that statutory provisions must be read harmoniously, with reference to the words "primary or intended use" in Section 3(b). Manganese Ore (India) Ltd. v. Regional Asstt. CST, (1976) 4 SCC 124: Relied upon to demonstrate that arbitrary or inconsistent administrative actions offend the principle of equality.

The respondent cited: Basawaraj & Anr. v. Special Land Acquisition Officer, (2013) 14 SCC 81, and Fuljit Kaur v. State of Punjab, (2010) 11 SCC 455: To argue that mere precedents of erroneous approvals cannot justify a wrongful grant of relief to others.

Reasoning and Analysis of the Judge: The Court held that the reliance by the Controller on documents such as the ICMR White Paper, various statutes including the Environment (Protection) Act, 1986, and the Prohibition of Electronic Cigarettes Act, 2019—without furnishing them to the appellant or specifically listing them in the hearing notice—violated the principles of natural justice. The Court found that the appellant was not given a fair chance to respond to or refute the material that formed the basis for the denial of the patent.

The Court emphasized that the Patents Act distinguishes between patentability and commercial exploitability. Citing Article 27.2 of the TRIPS Agreement and Article 4quater of the Paris Convention, the Court reiterated that the existence of regulatory restrictions on sale or commercial use cannot be a standalone ground for denying a patent.

The Court also noted that the Controller's reliance on Section 3(b) misapplied the standard from "intent principle" to "effect principle," conflating the harmful effects of nicotine with the intent of the invention. Additionally, examples provided by a former Deputy Controller of Patents did not include nicotine-related devices within the ambit of Section 3(b), undermining the validity of the objection raised.

Final Decision: The High Court allowed the appeal, set aside the impugned order dated 26th June 2023, and remanded the matter back to the Patent Office. The Court directed that the matter be reheard afresh by a different competent officer, with all relevant materials disclosed to the appellant, and a decision to be rendered within six months from the date of the order.

Law Settled in This Case: This judgment affirms that a patent application cannot be rejected based on materials or statutory instruments that are not disclosed to the applicant before decision-making. It also settles that regulatory prohibitions or public health policies do not, by themselves, disqualify inventions from patent protection under Indian law unless the "primary or intended use" is inherently contrary to public order or morality. Further, the distinction between patent grant and commercialization is legally significant and must be upheld.

Case Title: ITC Limited Vs The Controller of Patents, Designs & Trademarks: Date of Order: 30th April 2025: Case Number: IPDPTA No. 121 of 2023:Name of Court: High Court at Calcutta:Name of Judge: Hon'ble Justice Krishna Rao

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Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: ajayamitabhsuman@gmail.com, Ph no: 9990389539